Shares of Dentsply Sirona (XRAY -0.82%) have sunk 11.8% as of 10:26 a.m. ET on Tuesday. The decline comes after the dental products company announced that it had fired CEO Don Casey. Dentsply Sirona has made John Groetelaars interim CEO. Groetelaars currently serves on the company's board of directors.
Dentsply Sirona has also made Barbara Bodem interim CFO. She will take the baton from Jorge Gomez, who announced earlier this month that he's leaving the company to become CFO at another publicly traded company.
In addition, Dentsply Sirona gave a sneak peek at its first-quarter results. The company stated that it expects net sales will be around $965 million, down 1.4% year over year and lower than the $1.02 billion expected by analysts. It should report adjusted earnings per share of between $0.48 and $0.52. The range is well below the consensus earnings estimate of $0.67.
Investors worry anytime a CEO departs unexpectedly. Such sudden moves raise questions about whether there's a scandal below the surface that could damage the company.
It's understandable that these concerns could be even greater in this case. Many companies don't unequivocally state that they've terminated their CEOs. But Dentsply Sirona did. And its firing of Casey on the heels of Gomez's departure as CFO is likely to raise eyebrows even more.
Dentsply Sirona was smart, though, to provide its disappointing Q1 numbers at the same time as its update about a change in CEO. Getting all the bad news out at one time should reduce the impact on the healthcare stock when the company officially reports its Q1 results next month.
Some investors could view board chairman Eric Brandt's gracious comments about Casey -- thanking him for his service and wishing him well -- as a reason to believe there's nothing to worry about. We'll have to wait to see if there's more to the story. The most important thing to focus on, though, is the company's business performance. Dentsply Sirona will have more to say about that in its Q1 update, scheduled for May 5.