DENTSPLY 2025 Q1 Earnings Misses Targets as Net Income Rises 11.8%

DENTSPLY Sirona reported its fiscal 2025 Q1 earnings on May 8th, revealing mixed results. While the company surpassed Wall Street's revenue expectations, it experienced a 7.8% year-on-year decline to $879 million. The adjusted EPS of $0.43 significantly exceeded analyst estimates of $0.30. Despite the revenue drop, DENTSPLY Sirona maintained its 2025 outlook, expecting organic sales to decline by 2% to 4% and adjusted EPS to stay within the $1.80 to $2.00 range, indicating confidence in its transformational strategies.

Revenue

DENTSPLY's total revenue decreased by 7.8% to $879 million in 2025 Q1, compared to $953 million in 2024 Q1.

Earnings/Net Income

DENTSPLY's EPS rose by 11.1% to $0.10 in 2025 Q1 from $0.09 in 2024 Q1, marking continued earnings growth. Net income increased by 11.8% to $19 million in 2025 Q1 from $17 million in 2024 Q1, demonstrating positive momentum despite reduced revenue.

Post-Earnings Price Action Review

The strategy of buying DENTSPLY (XRAY) shares after a revenue increase quarter-over-quarter and holding for 30 days resulted in poor performance over the past five years. This approach yielded a return of -55.72%, significantly underperforming the benchmark return of 92.56%, with an excess return of -148.28%. The compounded annual growth rate (CAGR) was -15.09%, indicating substantial losses for investors. Additionally, the strategy experienced a high maximum drawdown of -79.05% and a Sharpe ratio of -0.42, reflecting significant risk and negative returns. These metrics underscore the challenges faced by this investment strategy.

CEO Commentary

Simon Campion, Chief Executive Officer, highlighted DENTSPLY Sirona's organic growth in two of its three global regions, despite an overall organic sales decline of 4.4%. He emphasized improvements in operational efficiency and customer experience as key drivers of performance. Campion stressed the importance of innovation, stating, "Our commitment to customers and investors remains on delivering meaningful progress through thoughtful transformation and customer-centric product innovation." He acknowledged global trade challenges, expressing a cautious approach moving forward while remaining confident in executing commitments despite macroeconomic uncertainties.

Guidance

DENTSPLY Sirona maintains its 2025 outlook for organic sales and adjusted EPS, anticipating organic sales to decline by 2% to 4% and adjusted EPS to remain between $1.80 and $2.00. The company revised its reported sales guidance to $3.6 billion to $3.7 billion, reflecting changes in foreign currency rates. Campion highlighted an improved adjusted EBITDA margin outlook of greater than 19%, driven by favorable FX rates. For Q2, the company expects organic sales to decline mid-single digits, with adjusted EPS projected to increase year-over-year primarily due to margin expansion.

Additional News

DENTSPLY Sirona has recently seen strategic moves within its leadership and corporate structure. In March, Director Gregory T. Lucier acquired 15,142 shares of DENTSPLY Sirona stock, signaling insider confidence in the company's future. Furthermore, the company announced a quarterly cash dividend of $0.16 per share on February 27, 2025, payable on April 11 to holders of record as of March 28. This dividend reflects DENTSPLY Sirona’s commitment to returning capital to shareholders despite the challenging sales environment. Additionally, recent analyst activity includes Piper Sandler downgrading its price objective to $16.00, indicating cautious market sentiment surrounding the company's growth prospects.