Envista (NVST) Q2 Earnings & Revenues Miss, Margins Fall

Core Points - Envista Holdings Corporation reported adjusted earnings per share (EPS) of 11 cents for Q2 2024, a decline of 74.4% year over year, missing the Zacks Consensus Estimate by 59.3% [1] - The company's GAAP loss was $6.69 compared to earnings of 29 cents in the same quarter last year [2] - Revenues totaled $633.1 million, down 4.4% year over year, and missed the Zacks Consensus Estimate by 2.3% [3] Revenue Breakdown - Specialty Products & Technologies segment generated $415.1 million, a decrease of 0.5% year over year [4] - Equipment & Consumables segment revenues fell 11.2% year over year to $218 million [4] Operational Performance - Gross profit decreased by 13.7% year over year to $326.6 million, with gross margin contracting by 557 basis points to 51.6% due to a 4.4% decline in sales and an approximately 8% rise in cost of sales [5] - Operating profit plummeted 99% year over year to $48.1 million, with the operating margin contracting by 1183 basis points to 0.8% [6] Financial Position - Cash and cash equivalents at the end of Q2 2024 were $1.04 billion, up from $948.5 million at the end of Q1 2024 [7] - Long-term debt remained unchanged at $1.39 billion [7] - Year-to-date net cash provided by operating activities was $133.4 million, an increase from $78.2 million a year ago [7] 2024 Guidance - The company expects core sales to decline between 1% and 4% and adjusted EBITDA margins to be in the range of 10%-12% for 2024 [8] - A further decline is anticipated in Q3 before returning to growth in Q4 [8] - The current Zacks Consensus Estimate for full-year revenues is $2.56 billion, suggesting a 0.3% decline from the previous year [8] Market Context - Envista's Spark division reported slowed sales growth due to deferring a larger portion of case revenues, impacting quarterly sales despite case starts growing above market levels [10] - Diagnostics sales contracted in high single digits due to the higher interest rate environment and exiting lower priority, price-sensitive geographic markets [11]