Dental and healthcare products company
DENTSPLY International Inc.
) fourth-quarter 2012 adjusted earnings of 56 cents per share
surpassed the Zacks Consensus Estimate by a penny and exceeded
the year-ago adjusted earnings of 51 cents (up 9.8%).
Adjusted earnings excluded one-time items such as
restructuring, amortization, income tax-related and
acquisition-related expenses as well as Orthodontics business
However, reported profit attributable to DENTSPLY jumped more
than three fold year over year to $126.8 million (or 88 cents a
share). The company received an income taxes benefit of $39.6
million in the quarter.
For the full year, adjusted earnings of $2.22 beat the Zacks
Consensus Estimate by a penny and transcended the year-ago
earnings of $2.03 (up 9.4%). Profit (attributable to the company)
surged 28.5% year over year to $314.2 million (or $2.18 a
Revenues grew 2.1% year over year to $753.3 million and beat
the Zacks Consensus Estimate of $747 million. Excluding precious
metal content, net sales increased 3.8% (up 5.9% in constant
currency) to $703.5 million. Growth was backed by strong internal
sales, particularly in the emerging markets.
For the fiscal year, sales soared 15.4% year over year to
$2,928 million, marginally surpassing the Zacks Consensus
Estimate of $2,921 million. Excluding the precious metal content,
revenues jumped 16.4% to $2,714 million. Acquisitions and strong
internal growth led to the increase in sales in 2012.
Gross margin in the reported quarter increased to 52.0% from
48.9% a year ago. Selling, general and administrative expenses
(as a percentage of sales) declined 150 basis points year over
year to 38.2%.
Operating margin jumped up to 12.9% from 8.9% a year ago.
Adjusted operating margin (as a percentage of net sales,
excluding precious metal content) was 17.1% versus 16.0% in the
DENTSPLY ended the fourth quarter with cash and cash
equivalents of $80.1 million, up 3.9% year over year. Long-term
debt decreased 18% to $1,222.0 million.
Based on the improving global dental market trends along with
the impact of currency rates, DENTSPLY expects to generate
adjusted earnings per share in the band of $2.38 and $2.48 for
2013. The Zacks Consensus Estimate for 2013 earnings is pegged at
DENTSPLY is poised to grow its share in the dental consumable
market, driven by a strong product base and significant
investment in product/technology innovation and sales/marketing
infrastructure. Management has reduced its debt level
significantly in 2012.
The company plans to invest in accretive acquisitions along
with share repurchase programs and dividends in 2013, which we
believe is a good step to leverage investor confidence. However,
DENTSPLY faces stiff competition in the dental market from other
DENTSPLY currently has a Zacks Rank #3 (Hold). Medical/Dental
Supplies companies worth a look are
Medical Action Industries Inc.
The Cooper Companies Inc.
). Medical Action carries a Zacks Rank #1 (Strong Buy), while the
other two companies carry a Zacks Rank #2 (Buy).
COOPER COS (COO): Free Stock Analysis Report
MEDICAL ACTION (MDCI): Free Stock Analysis
STERIS CORP (STE): Free Stock Analysis Report
DENTSPLY INTL (XRAY): Free Stock Analysis
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