Shares of Envista Holdings Corp (NVST) surged 19.6% in pre-market trading on October 31, 2024, after the dental products company reported better-than-expected third-quarter results, surprising investors despite year-over-year declines in revenue and earnings.

For the quarter ended September 30, 2024, Envista reported revenue of $601 million, down 4.8% from the same period last year, but beating analysts' expectations of $590.3 million. The company's adjusted earnings per share (EPS) came in at $0.12, lower than $0.43 a year ago but surpassing the consensus estimate of $0.09.

Envista faced headwinds from a challenging market environment, with core sales declining 5.3% year-over-year across its Specialty Products and Technology, and Equipment and Consumables segments. The company's adjusted gross margin and adjusted EBITDA margin also suffered, decreasing by 490 basis points and 10.5 percentage points, respectively, compared to the prior year. The revenue deferrals related to Envista's Spark product and dealer inventory realignment contributed to the lower margins.

Despite the challenges, Envista reaffirmed its full-year guidance, expecting a return to growth in the fourth quarter. The company highlighted positive developments, such as gaining market share in orthodontics and diagnostics, strong free cash flow generation, and strategic investments in growth areas like premium implants. Envista's CEO, Paul Keel, emphasized the company's focus on accelerating growth and improving productivity, stating that investments in growth are expected to be self-funding as the company generates more gross margin dollars from increased growth.