XRAY Stock Falls Despite Q2 Earnings Beat, Wellspect Drives Sales

XRAY's Revenue Trends and Regional Mix

Revenues declined 4.1% reportedly to $898 million and 6.3% at constant currency (cc). The metric, however, beat the Zacks Consensus Estimate by 1.6%.

Weakness across three dental segments weighed on sales, partly offset by Wellspect Healthcare growth and a 1.8% negative impact from Byte.

Shares of XRAY declined 1.9% in yesterday’s after-market trading. The stock has gained 15.2% year to date compared with the industry’s 4.8% increase. The S&P 500 Index has increased 12.7% in the same period.

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Dentsply Sirona's Segment Performance

DENTSPLY SIRONA generates revenues under four segments — Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare.

Connected Technology Solutions revenues totaled $239 million, down 1.5% year over year and 3.8% at constant currency. Lower CAD/CAM volumes in the Americas and unfavorable price mix in EMEA weighed on results, partly offset by double-digit APAC growth. Equipment and Instruments also faced lower Treatment Center volumes. Our projection was $218 million for the metric.

Essential Dental Solutions generated $376 million in revenues, down 2.7% reportedly and 5% at cc. Our projection was $367.8 million for the metric.

Orthodontic and Implant Solutions sales declined 13.2% to $197 million, reflecting an $18 million Byte headwind and lower orthodontic and implant volumes. Our projection was $211.2 million for the metric.

Wellspect Healthcare was the bright spot, with revenues rising 7.1% to $86 million, supported by new product launches. Our projection was $87.8 million for the metric.

DENTSPLY SIRONA’s Geographic Revenues

Beginning first-quarter 2026, DENTSPLY SIRONA started reporting under new regional segments — North and South America as Americas, Europe, the Middle East, and Africa (“EMEA”) and Asia Pacific (“APAC”). The company used to report under US, Europe and Rest of World geographic segments.

Americas revenues fell 10.7% as reported and 11.6% at cc.

EMEA sales edged up 0.2% on a reported basis but declined 3.6% at cc.

APAC revenues slipped 1% as reported and 1.2% at cc.

XRAY's Margin and Expense Picture

Adjusted gross profit was $506 million compared with $523 million a year earlier. Still, adjusted gross margin improved 50 bps to 56.4%. The quarter benefited from tariff refunds, though lower volumes, unfavorable mix and tariff costs pressured gross profit. We had projected an adjusted gross margin of 53.7% for the second quarter.

Selling, general and administrative expenses increased 6.4% year over year to $364 million, while research and development expenses rose 21.6% to $45 million.

Adjusted operating profit totaled $142 million, reflecting a 16.5% decrease from the prior-year quarter’s level. The adjusted operating margin contracted 240 bps to 15.8%.  We had projected an adjusted operating margin of 12.8% for the second quarter.

Adjusted EBITDA declined 3.3% to $190 million. Adjusted EBITDA margin expanded 20 basis points (bps) to 21.3%.

Dentsply Sirona's Cash Flow and Liquidity

XRAY ended June with $239 million in cash and cash equivalents, down from $326 million in the first quarter.

Cumulative net cash provided by operating activities at the end of the second quarter of 2026 was $139 million compared with $55 million in the prior-year period. The improvement primarily reflected approximately $44 million of tariff refunds and better inventory and accounts-payable management. Free cash flow during the second quarter increased to $55 million from $16 million.

During the quarter, the company repurchased 1.3 million common shares for roughly $12 million, advancing its capital-allocation efforts while maintaining its focus on working-capital improvement.

DENTSPLY SIRONA has a consistent dividend-paying history, with its five-year annualized dividend growth being 9.5%.

XRAY's 2026 Outlook and Strategic Progress

DENTSPLY SIRONA maintained its 2026 net sales outlook of $3.5 billion to $3.6 billion and adjusted EPS guidance of $1.40-$1.50. The expected benefits from tariff refunds are not included in the adjusted earnings outlook. The Zacks Consensus Estimate for sales and adjusted EPS is currently pegged at $3.58 billion and $1.42, respectively.

The company continued to execute its Return-to-Growth Action Plan, focusing on strengthening distributor relationships, realigning sales teams, and reinvesting in the business. It also expanded its partnership with Medline Sinclair in Canada, marking the sixth enhancement to its distribution network announced in 2026. Additionally, John Fortson assumed the role of executive vice president and chief financial officer in July 2026.

XRAY’s Zacks Rank & Key Picks

DENTSPLY SIRONA currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, The Cooper Companies COO and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.40%.

The Cooper Companies reported a second-quarter fiscal 2026 adjusted EPS of $1.21, which beat the Zacks Consensus Estimate by 10.00%. Revenues of $1.08 billion beat the Zacks Consensus Estimate by 2.6%.

The Cooper Companies has an estimated long-term earnings growth rate of 8.3%. COO’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.80%.

Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.27%.

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