What Happened?
Shares of dental products company Dentsply Sirona (NASDAQ: XRAY) fell 13.4% in the morning session after it reported disappointing third-quarter results, highlighted by a significant earnings miss and a lowered forecast for the full year. While revenue of $904 million declined 4.9% year-over-year, it narrowly beat analysts' expectations. The main concern for investors was profitability, as adjusted earnings per share came in at $0.37, missing Wall Street's consensus estimate of $0.45 and falling sharply from $0.50 in the same quarter last year. The company's operating margin was negative 24.1%, underscoring its struggles with costs. Compounding the negative news, management lowered its full-year adjusted EPS guidance to a midpoint of $1.60. The combination of missing current earnings estimates and reducing future expectations prompted the negative reaction from investors.
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What Is The Market Telling Us
Dentsply Sirona’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for Dentsply Sirona and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 1.1% on the news that the U.S. Securities and Exchange Commission (SEC) concluded its investigation into the company's accounting practices and did not intend to recommend any enforcement action. The probe, which began in 2022, had focused on the dental-supplies maker's use of incentives to sell products to distributors in 2021 and whether those incentives were properly accounted for in financial reports. The conclusion of the investigation removed a significant uncertainty for investors. In a filing, Dentsply Sirona noted that it had fully cooperated with the SEC and viewed the closure of the probe without any enforcement action as a "significant and favorable development.".
Dentsply Sirona is down 40.4% since the beginning of the year, and at $11.17 per share, it is trading 53.4% below its 52-week high of $23.98 from November 2024. Investors who bought $1,000 worth of Dentsply Sirona’s shares 5 years ago would now be looking at an investment worth $244.23.
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