Envista Holdings Reports Q3 Earnings: A Mixed Performance Amid Market Challenges
Envista Holdings Corporation (NVST) announced adjusted earnings per share (EPS) of 12 cents for the third quarter of 2024, reflecting a significant 72% decline from the previous year. However, this figure was 33.3% higher than the Zacks Consensus Estimate.
These adjustments account for non-cash charges related to the amortization of acquisition-related and other intangible assets, restructuring costs, and asset impairments.
For the quarter, the company recorded a GAAP loss of 5 cents, contrasting with an earnings figure of 13 cents per share from the same quarter last year.
Explore more on earnings estimates and surprises at Zacks Earnings Calendar.
After the earnings release, NVST shares enjoyed a boost, climbing 2.3% to close at $19.23.
Revenue Details for Q3
For the reporting quarter, NVST generated revenues of $601 million, marking a 4.8% drop from the previous year. Nevertheless, this figure exceeded the Zacks Consensus Estimate by 1.5%.
Breakdown of Q3 Revenue Segments
In Q3, revenues from the Specialty Products & Technologies segment reached $381.7 million, down 4.5% year over year.
Revenue from Equipment & Consumables fell 5.4% year over year, totaling $219.3 million.
Charting NVST’s Price, Consensus, and EPS Surprises
Envista Holdings Corporation price-consensus-eps-surprise-chart | Envista Holdings Corporation Quote
Operational Insights from NVST
Gross profit for the reported quarter declined by 12.7% to $317.3 million, with the gross margin shrinking by 475 basis points (bps) to 52.8%, attributed to a 4.4% drop in sales and nearly 8% increase in costs.
Selling, general, and administrative expenses rose 5.1% year over year, reaching $270.9 million, while research and development costs decreased by 14.4% to $25.5 million.
Operating profit plummeted 75% to $20.9 million, resulting in an operating margin contraction of 972 bps to 0.8%.
NVST’s Financial Standing
As of the end of Q3 2024, Envista’s cash and cash equivalents stood at $991.3 million, down from $1.04 billion at the second quarter’s close. Long-term debt was reported at $1.31 billion, a decrease from $1.39 billion in the prior quarter.
Year-to-date net cash provided by operating activities totaled $204.1 million, compared to $173.7 million for the same period in the previous year.
Envista’s Forecast for 2024
Looking ahead, the company maintains its forecast for negative core sales growth between 1% and 4% and anticipates adjusted EBITDA margins in the range of 10%-12%. Envista is optimistic about returning to growth by the fourth quarter.
The current Zacks Consensus Estimate for 2024 revenues is set at $2.50 billion, indicating a 2.7% decline compared to last year.
Analysis on NVST’s Performance
Despite the mixed results for Q3 2024, Envista surpassed earnings and revenue estimates. The company gained in both orthodontics and diagnostics sectors and expanded its consumables market. Notably, new products launched in the quarter included a CBCT platform and improvements for the DEXIS intraoral scanner.
However, sales volumes in both segments fell due to factors including changes in revenue deferral policies and channel inventory adjustments, which impacted margins during the quarter.
Zacks Rank and Noteworthy Alternatives
Currently, Envista holds a Zacks Rank of #3 (Hold).
Better-ranked stocks within the medical sector include Quest Diagnostics (DGX), Intuitive Surgical (ISRG), and Boston Scientific Corporation (BSX).
Quest Diagnostics reported adjusted earnings of $2.30 for Q3 2024, slightly above the Zacks Consensus Estimate, with revenues of $2.49 billion exceeding expectations as well. DGX holds a Zacks Rank of #2 (Buy).
Intuitive Surgical’s Q3 EPS came in at $1.84, surpassing estimates by 11.5%, while revenue hit $2.04 billion, also above consensus expectations. This organization has an estimated earnings growth rate of 20.1% for 2024, outpacing the industry average of 13.8%.
Boston Scientific posted adjusted earnings of 63 cents for Q3, exceeding estimates, with revenues hitting $4.21 billion.
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