Sirona Dental Q4 Profit Up 4%, But Sees 2014 Earnings Below Estimates

(RTTNews) - Sirona Dental Systems Inc. (SIRO), a producer of dental products, on Friday reported a 4 percent increase in profit for the fourth quarter on strong revenue growth at its CAD/CAM systems. Revenue for the quarter beat analysts' estimates. Looking ahead, the company forecast earnings for fiscal 2014 below Street expectations.

Jeffrey Slovin, President and CEO of Sirona said, "Our record fourth quarter was led by CAD/CAM's 30.3% constant currency growth, driven by robust trade-up programs and new user demand. On a regional basis, Germany had another exceptional quarter, ending the year with 23.4% growth, constant currency."

The Long Island City, New York-based company's net income for the fourth quarter was $36.24 million or $0.65 per share, up from $34.74 million or $0.62 share in the same period last year.

The latest quarter's results include a loss on foreign currency translations of $1.85 million, compared to gain of $382 thousand in the year-ago period. The company recorded a gain on derivative instruments of $738 thousand, compared to gain of $2.15 million in the prior-year quarter.

On an adjusted basis, earnings for the quarter were $0.81 per share, compared to $0.73 per share in the year-ago period. On average, fourteen analysts polled by Thomson Reuters expected the company to report earnings of $0.80 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenue for the quarter grew 13 percent, or 8.3 percent in constant currency, to $278.60 million from $247.36 million in the same period last year. Analysts had a consensus revenue estimate of $265.74 million for the quarter.

CAD/CAM Systems revenue for the quarter increased 35 percent, or 30.3 percent on a constant currency basis, while Imaging Systems revenue increased 6 percent, or 2.7 percent in constant currency. Instruments segment revenue increased 3 percent, but declined 2.6 percent on a constant currency basis. Treatment Centers revenue declined 4 percent, or 8.9 percent on a constant currency basis.

Revenue in the U.S. increased 3 percent on top of last year's 34 percent growth. Sales in international markets increased 17 percent, or 10.6 percent in constant currency, led by CAD/CAM and Imaging in Europe. The company noted that sales were exceptionally strong in Germany, which benefited from a CAD/CAM trade-up program as well as generally increasing demand for products in this segment. For fiscal 2013, Sirona Dental's net income increased to $146.75 million or $2.61 per share from $133.83 million or $2.36 per share last year. Adjusted earnings per share were $3.41, compared to $3.03 in the prior year.

Revenues for the year grew 13 percent, or 11.7 percent in constant currency, to $1.10 billion from $979.35 million in the prior year.

Analysts expected the company to earn $3.40 per share for the year on revenues of $1.09 billion.

Looking ahead to fiscal 2014, Sirona Dental forecasts adjusted earnings in a range of $3.60 to $3.70 per share, reflecting growth of about 6 to 9 percent.

The company projects constant currency revenue growth for the year of 4 percent to 6 percent, reflecting the difficult comparisons created by this year's 20 percent constant currency growth in the company's two largest markets, the U.S. and Germany.

Analysts expect the company to report earnings of $3.77 per share for the year on revenues of $1.18 billion.

SIRO closed Thursday's trading at $72.61. In Friday's pre-market, the stock is up $1.44 or 1.98 percent to $74.00.