Henry Schein Inc., Long Island's largest public company, Tuesday reported an increase in second-quarter revenue despite slower sales of dental products in North America.
Shares in the multinational distributor of products to clinics and the offices of dentists and physicians slumped 4.3 percent to $61.76 at the market's close on Tuesday following the premarket earnings release.
The report comes after Monday's announcement that Henry Schein had acquired a majority stake in Cliniclands, a distributor serving dental practices in Sweden, Denmark and Norway.
Terms of the deal were not disclosed.
The acquisition of the Trelleborg, Sweden, company marks Henry Schein's entry into the Scandinavian market and expands the Melville company's global footprint to 32 countries.
Net sales from continuing operations for the quarter ended June 29 were $2.4 billion, an increase of 5.7 percent compared with the 2018 period.
Net income was $116.8 million, or 78 cents per diluted share, versus $110.6 million, or 72 cents per diluted share, in the previous year's quarter.
"Softness in North America dental and technology and value-added services sales was offset by solid growth in dental sales" in Germany, Austria and Switzerland, Stanley M. Bergman, Henry Schein chairman and chief executive, said in a statement.
Dental sales decreased 0.7 percent to $1.6 billion, while medical sales increased 13.6 percent to $697.6 million, and sales of technology and value-added services from continuing operations climbed 39.9 percent to $125.1 million.
"We believe our medical group is well positioned with large group practices, independent physician offices and alternate sites of care," Bergman said.
The quarterly report excludes contributions from Henry Schein's former animal health business, which was spun off into a publicly traded company, Covetrus.
In a research note, Jeff Johnson, an analyst at Robert W. Baird & Co. Inc., said that the slowdown in North American dental sales was "a bit surprising" and that Henry Schein and other distributors of dental products are facing growing pricing pressures.
Johnson has a "neutral" rating on Henry Schein.
The company said it took a pretax charge in the second quarter of $11.9 million, or 6 cents per diluted share, in severance pay, facility closings and other costs related a previously disclosed restructuring program.
Henry Schein posted revenue of $13.2 billion ($9.4 billion from continuing operations) in 2018, triple the revenue of any other publicly traded Long Island company.