Dentsply Sirona (XRAY) Stock: Climbing On 2019 Guidance

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DENTSPLY SIRONA Inc (NASDAQ: XRAY) is having an incredibly strong start to the trading session this morning, and for good reason. The company reported its preliminary results for the fourth quarter and full year, showing strong growth.

As you could imagine, the news excited investors, pushing the stock on a run for the top. Today, we’ll talk about:

  • The preliminary results;
  • what we’re seeing from XRAY stock as a result; and
  • what we’ll be watching for ahead.

XRAY Stock Climbs On Preliminary Results

As mentioned above, Dentsply Sirona is having a great start to the trading session this morning after announcing preliminary financial results. Here’s what we saw from the announcement:

Fourth Quarter

  • Net Sales – During the fourth quarter, the XRAY generated net sales in the amount of $1.0597 billion. This figure saw a decline of 2.9% year over year from $1.091 billion. While revenue increased around the world, these gains were offset by a decline of 14.7% in the United States.
  • Net Income – Net income for the fourth quarter came in at $1.8 million, working out to earnings of $0.01 per share. In the same quarter last year, the company reported a net loss of $650.4 million, or $2.85 per diluted share.

Full Year 

  • Net Sales – For the full year, net sales declined 1.8% to come in at $3.9863 billion. The decline in sales was primarilly the result of inventory destocking at dealer partners.
  • Net Loss – Net losses for the year came to $1.011 billion, or $4.51 per share. This compares well year over year to a net loss of $1.55 billion or $6.76 per share in 2017.

Guidance

Finally, XRAY said that it is expecting for adjusted earnings for the 2019 year to come in between $2.25 per share and $2.40 per share.

In a statement, Don Casey, CEO At XRAY, had the following to offer:

Although fiscal 2018 financial results were disappointing, we have taken important steps to position the company for improved financial performance. We have completed a top to bottom diagnostic of the Company and are executing a major restructuring plan to accelerate growth, improve margins and simplify our business.

There has been progress in multiple areas. We are operating under our new simplified organizational framework that included consolidation of our dental product groups, our regional commercial groups, and a centralized supply chain. Additionally, our focused R&D efforts have delivered a significant innovation in PrimeScan, with more innovative new products following later this year. The Company’s portfolio shaping efforts resulted in the sale or exit of three underperforming business. We have also started the difficult, but necessary process of reducing our employee base by 6% to 8%, and are well on our way to achieving the targets we shared in November of 2018. The entire management team is confident that this is the right direction for Dentsply Sirona. It will allow us to drive improved operating performance and to deliver for our customers, our employees, our partners, and our shareholders.

What We’re Seeing From The Stock 

One of the first lessons that we learn when wes tart to work in the market is that the news causes moves. In the case of Dentsply Sirona, the news was mixed, but leaned toward the positive side.

While the company saw declines in revenue, net income showed some improvements. Moreover, the guidance for 2019 earnings proved to be positive.

So, it’s not surprising that excited investors are sending the stock up in the market this morning. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:08), XRAY stock is trading at $41.76 per share after a gain of $0.52 per share or 1.26% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on XRAY. In particular, we’re interested in following the story surrounding the company’s continued work to expand sales globally and pick up the slack on sales in the United States. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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