DENTSPLY reported mixed third-quarter 2014 results. Although
earnings per share (EPS) beat the Zacks Consensus Estimate,
revenues missed the same. Management narrowed its 2014 EPS outlook.
The company continues to focus on improving cost structure that
will help it to achieve 20% operating margin by 2017. We believe
that DENTSPLY's innovative product pipeline, stabilizing U.S. and
Western European markets, strong balance sheet and robust cash flow
generation ability are key growth catalysts. The company expects to
continue its share buyback program and pursue strategic
acquisitions based on improving liquidity and cash flow position.
However, strengthening of U.S. dollar against Euro, weakness in
Japan, Brazil and CIS region, intensifying competition and higher
capital expenditure on product development are some of the
headwinds in the near term. Given the mixed signals, we maintain
our Neutral recommendation and set a price target of $56.00.
Headquartered in York, PA, DENTSPLY International Inc. (XRAY) is
a global leader in the design, development, manufacture and
marketing of dental consumables, dental laboratory products, dental
specialty products and consumable medical device products. The
company has global operations with sales in more than 120
DENTSPLY reported net sales of $2.95 billion in 2013. By product
category, Chairside Consumables (Restorative & Preventive
products), Specialties (Implants, Endodontics, Orthodontics),
Prosthetics (Artificial Teeth, Denture Bases, Crown and Bridge,
CAD/CAM) and Medical (Urology, Surgery, Instruments) contributed
28%, 48%, 11% and 13% of sales in 2013, respectively.
In the nine months ended Sep 30, 2014, the company reported net
sales of $708.2 million, which was flat on a year-over-year basis.
Professional dental products represented approximately 88% of sales
in the nine-month period.
The company reports operations primarily under three segments
Dental Consumables and Certain International businesses (25.8% of
net sales in the nine months ending Sep 30), Dental Specialty and
Laboratory and Certain Global Distribution businesses (54.6%), and
Healthcare and Emerging Markets businesses (19.7%).
DENTSPLY International Inc. (XRAY): Read the Full
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