Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of dental equipment maker Sirona Dental Systems
So what: Sirona's strong quarterly performance was all about the foreign markets -- even though currency fluctuations hurt its results. U.S. sales crept up just 0.9% from the prior year, while revenue outside the U.S. jumped 23% on a constant currency basis. The company said it saw particularly strong demand from Germany, other European markets, and the Asia-Pacific region. The bottom line looked good as well, as profit per share -- after adjusting for amortization expenses -- increased 19% to $0.96 and easily topped the $0.81 estimate from Wall Street.
Now what: As if all that wasn't enough, the company also boosted its full-year outlook. Management now sees constant currency revenue growing 9% to 12%, versus previous guidance for 7% to 9% growth. It also expects operating income to clock in at a midpoint of $212 million, up from its previous $204 million estimate.
Business appears to be clicking for Sirona right now, particularly beyond the U.S. Investors may want to keep an eye on cash flow in the coming quarters; cash flow from operations lagged net income during the December quarter, which is unusual for Sirona. Trading at just about 18 times fiscal 2011 profit estimates, shares are looking a bit pricey, so investors on the sidelines may want to hold out for a better price.
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