Dentsply Sirona Inc. (NASDAQ:XRAY) shares are trading lower on Thursday.

The company reported third-quarter adjusted earnings per share of 50 cents, beating the street view of 47 cents. Quarterly sales of $951 million (increased 0.5%) outpaced the analyst consensus estimate of $939.10 million.

The company recorded a $495 million non-cash goodwill impairment charge in the Orthodontic and Implant Solutions segment. This was due to ongoing economic challenges, legislative changes affecting Byte, weaker demand, increased competition in implants, and lower expected lab material volumes.

Segment wise, Connected Technology Solutions fell 2.3%, Essential Dental Solutions gained 6.6%, Orthodontic and Implant Solutions slumped 4.6%, while Wellspect Healthcare fell 0.4%.

Also Read: Steve Madden Q3 Earnings Top Estimates As Revenue Jumps 13%, Lifts 2024 Outlook

Quarterly adjusted EBITDA fell 1.8% to $170 million. Adjusted EBITDA Margin contracted to 17.9% from 18.3% in the quarter under review.

“Third quarter organic growth was driven by favorable timing in Essential Dental Solutions of approximately $20 million related to stocking orders in anticipation of U.S. ERP deployment, and higher sales in CAD/CAM, which benefited from the launch of our new scanner, Primescan 2,” said Simon Campion, President and Chief Executive Officer.

“Due to ongoing market pressures impacting equipment in the U.S., as well as the evolving landscape with Byte, we are lowering our full year organic sales outlook,” Campion added.

The company had $296 million of cash and cash equivalents as of September 30. Long-term debt as of quarter end totaled $1.795 billion.

Guidance: Dentsply Sirona revised its 2024 outlook due to market pressures impacting U.S. equipment, legislative changes affecting the direct-to-consumer aligner business model, and the voluntary suspension of sales, marketing, and shipments of Byte Aligners and Impression Kits.

The revised sales forecast is $3.79 billion – $3.83 billion, versus prior guidance of $3.86 billion – $3.90 billion and consensus of $3.878 billion, with an organic sales decline of 3.5% – 2.5% year over year.

The company expects 2024 adjusted EPS of $1.82 – $1.86 versus prior guidance of $1.96 – $2.02 and consensus of $1.98.

William Blair noted that some negative events have affected the stock since upgrading Dentsply Sirona last year. However, the firm still believes the stock offers an appealing risk-to-reward balance for a leading dental company with broad capabilities and strong potential in a promising market.

“We think the aforementioned headwinds will likely make shares a “show me” story in the near term but expect execution on operational efficiencies and potentially improving macro in the coming quarters can support the stock,” the analyst writes. William Blair maintains the Outperform rating.

Leerink Partners has downgraded Dentsply Sirona from Outperform to Market Perform.

Price Action: XRAY shares are trading lower by 25% to $18.02 at last check Thursday.

Read Next:

• Invesco Launches New ETFs Targeting AI, Cybersecurity, And Defense. Here’s How Some Of Their Peers Have Performed In The Past Year