Can DENTSPLY (XRAY) Deliver a Beat This Earnings Season?

DENTSPLY SIRONA Inc.’s XRAY third-quarter 2017 results, scheduled for release on Nov 3, are expected to show lackluster performance by dental consumables and laboratories — one of the major revenue-generating components. While this could majorly impact third-quarter earnings, an expected improvement in revenues at other segments should help the company post solid numbers.

Last quarter, DENTSPLY’s earnings and revenues missed the Zacks Consensus Estimate. The quarter posted lackluster results in dental and healthcare consumables segment that comprises preventive, restorative, instruments, endodontic and laboratory dental products as well as consumable medical device products. Sales increased just 1.9% to $554.1 million in the quarter.

The Zacks Consensus Estimate for dental consumables and laboratories stands at $520 million for the third quarter. This reflects a decline of almost 6.5% from the last reported quarter. Notably, DENTSPLY has been grappling with issues pertaining to equipment inventory levels at certain distributor bases. Furthermore, unfavorable consumer trend is likely to mar sales at the segment.

Let’s see how things are shaping up for the company prior to this release.

View Upbeat: The Zacks Consensus Estimate for DENTSPLY’s third-quarter earnings stands at 67 cents per share, signifying year-over-year growth of 1.1%. For revenues, the consensus estimate stands at $978.4 million, up 2.5% year over year. The company has been witnessing a rebound in Asia, particularly Japan, along with strong growth in Russia. However, the company lowered its outlook for the year. In fact, DENTSPLY’s results in the first half of the year have lagged expectations.

Domestic Market Holds Promise: We are upbeat about the gradual recovery in the U.S. market. The emerging markets provide significant opportunities for the company as these areas are vastly untapped with low dental product penetration. In fact, the Zacks Consensus Estimate for revenues in the region stands at $335 million, up 1.5% year over year. Apart from the United States, Europe has been a significant revenue contributor, with internal growth of 2.3% in the last quarter.

Buoyed by the bullish trends, our quantitative model shows an earnings beat for DENTSPLY this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. This is not the case here, as you will see below.

Zacks ESP: The Earnings ESP for DENTSPLY is +0.41%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DENTSPLY currently carries a Zacks Rank #3.

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

INC Research Holdings, Inc. INCR has an Earnings ESP of +1.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Penumbra, Inc. PEN has an Earnings ESP of +31.82% and a Zacks Rank #3.

Henry Schein, Inc. HSIC has an Earnings ESP of +0.45% and a Zacks Rank #3.

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.

Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research