Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Align Technology (NAS: ALGN) , a device company geared toward the dental industry, and maker of Invisalign, dipped by as much as 10%, following a cautionary earnings note from the company warning that it would only meet the low-end of its previous guidance.
So what: Blaming weak sales in the dental business and the negative effects of Superstorm Sandy, which caused both operational and sales disruptions, Align updated its fourth-quarter forecast to sales of $134.2 million-$137.8 million, on a profit of $0.21-$0.23 per share. Wall Street had been looking for Align to report sales of $136 million, and a profit of $0.23 per share. Align also noted its intention to lay off 25 employees -- less than 1% of its workforce -- as it eliminates some non-crucial positions.
Now what: Sirona Dental Systems (NAS: SIRO) knocked my socks off when it crushed earnings estimates recently, but I believe that Align is more representative of the tepid spending we're witnessing in the dental industry. The best margins in the dental industry are often made on the most optional of procedures. Between a slowing economy and the threat that taxes on upper income earners may rise, the dental industry may be in for a toothache of major proportions in 2013.
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The article Why Align Technology Shares Dropped originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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