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Earnings Results: Invisalign maker sees more than $3 billion in market cap start to disappear after earnings, revenue sink

Align Technology Inc. shares dove more than 18% in after-hours trading Wednesday, after the maker of Invisalign teeth straighteners reported that profit fell more than 50% and sales declined more than 12% from last year.

Align
ALGN,
+1.68%

reported earnings of $72.7 million, or 93 cents a share, on revenue of $890.3 million, down from $1.02 billion a year ago. After adjusting for stock-based compensation and other effects, the company reported earnings of $1.36 a share, down from $2.87 a share a year ago.

“Our third-quarter results reflect continued macroeconomic uncertainty and weaker consumer confidence, as well as a significant impact from unfavorable foreign-exchange rates across all currencies that affect our operations,” Chief Executive Joe Hogan said in a statement.

“We remain confident in the execution of our strategic growth drivers despite the continuing economic headwinds,” he added.

In a conference call Wednesday afternoon, Hogan said that revenue would have been more than $57 million higher at the same exchange rates from the third quarter in 2021. The problems extend into the U.S., however, where he said orthodontists are finding fewer adults willing to pay for teeth straighteners.

“Invisalign case volumes for Americas was down sequentially single-digit percentages and primarily due to lower Invisalign adult shipments,” Hogan said in the conference call. “The environment remains challenging and feedback from our customers indicates consumer financing and patient no-shows affecting their practices in Q3, especially with adult patients.”

In their conference call, Align executives did not provide a full forecast for the fourth quarter, with Chief Financial Officer John Morici saying “underlying market dynamics as well as the reactions to macroeconomic headwinds by central banks, governments and consumers remain uncertain.”

He did say that Align’s operating margin would come in lower than executives’ previous target of 20%, and annual capital-expenditure spending would exceed $300 million. He also said that executives intend to continue repurchasing shares, and will look to spend $200 million on that effort before the end of the year.

Align’s stock decline in after-hours trading would lop more than $3 billion off of the company’s market capitalization were the decline to last through Thursday’s regular session. Align was worth a tad more than $17 billion at the end of Wednesday’s session, when the stock increased 1.7% to $221.64.

Align shares have already declined more than 66% so far this year, as the S&P 500 index
SPX,
-0.74%

has fallen 19%. The Tempe, Ariz., company reached a market cap of more than $55 billion last year.

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