DENTSPLY SIRONA Inc. ( XRAY ) shares are trading higher on Wednesday.

The company reported second-quarter adjusted earnings per share of 49 cents, missing the street view of 50 cents, and quarterly sales of $984 million, missing the analyst consensus of $995.66 million.

According to William Blair analyst Brandon Vazquez, largest miss came from Connected Technology Solutions (equipment), which was down 16% on an organic basis.

“Our second quarter results were unfavorably impacted by lower demand in our Connected Technology Solutions segment due to continued macroeconomic and competitive pressure,” said Simon Campion, President and Chief Executive Officer.

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In the second quarter of 2024, the company repurchased $150 million in stock and plans to buy back an additional $100 million in the third quarter.

In his research note, Vazuez adds that end-markets remain challenging, and Dentsply is not immune to headwinds, but the company has levers to pull to help outperform peers (costsavings, unique products, and share buybacks).

The company had $279 million of cash and cash equivalents as of June-end.

The company highlighted its second phase of transformation, where it aims to cut annual operating expenses by $80 million to $100 million over 12 to 18 months.

Dentsply Sirona ( XRAY ) is also projecting $40 million-$50 million in non-recurring charges to be expensed in 2024 and 2025.

The restructuring plan anticipates a net reduction in the company's global workforce of approximately 2% to 4%.

“The second phase of our transformation allows us to both fund reinvestment in our business to better position us to drive profitable growth and contribute to our 2026 adjusted EPS target,” Campion added. As part of this second phase, Andreas Frank, Executive Vice President and Chief Business Officer, will leave Dentsply Sirona ( XRAY ) in October.

Outlook: Dentsply Sirona ( XRAY ) forecasts 2024 sales of $3.86 billion to $3.90 billion, below the prior view of $3.91 billion to $3.97 billion. The outlook is also below the consensus of $3.93 billion, with organic growth expected to be flat or down 1%.

The company anticipates adjusted EPS of $1.96 to $2.02, slightly below the consensus of $2.01 and down from the previous range of $2.00 to $2.10.

In a regulatory filing, the company disclosed that in July 2024, it delivered a one-year notice of non-renewal in connection with its non-exclusive distribution agreements with Patterson Companies, Inc. ( PDCO ) for the distribution of dental equipment in the U.S. and Canada.

It is anticipated that Patterson will continue to be one of the company's two largest distributors as a percentage of its global revenue during the one-year notice period.

The company intends to engage in discussions for new distribution agreements with Patterson. However, failure to successfully renegotiate the distribution agreements or secure potential new agreements with another distributor could adversely affect its business, operating results, and financial condition.

Price Action: XRAY shares are trading higher by 3.02% to $27.59 at last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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