Sonic Healthcare, the biggest operator of medical laboratories in Europe, reported first-half profit that missed analysts' estimates as the strength of the Australian dollar eroded the value of overseas earnings.
Net income rose 14 per cent to $155.2 million, or 39.7 cents a share, in the six months ended Dec. 31, from $136.5 million, or 38.8 cents, a year earlier, Sonic said today. Analysts projected $166 million, according to the median of five estimates compiled by Bloomberg. Sales gained 3.5 per cent to $1.49 billion.
The shares fell after the results, which showed the stronger Australian dollar wiped $76.4 million from sales. Sydney-based Sonic gets about half of revenue from Europe and the US after it spent more than $US1.4 billion buying 19 pathology companies in the regions in the past five years to tap demand for blood tests and X-rays.
``The business is progressively becoming an offshore company, so the result was skewed,'' said Andrew Goodsall, a health-care analyst at UBS AG in Sydney, who predicted profit of $162 million. ``There's quite a lot of movement in currencies this half compared to the prior corresponding period.''
The US dollar weakened 11 per cent against the Australian currency in the six months and the euro lost 8.3 per cent, compared with gains in the same period a year earlier, according to data compiled by Bloomberg.
Sonic fell 29 Australian cents, or 2 per cent, to close at $14.20 in Sydney trading, while Australia's benchmark S&P/ASX 200 Index was little changed.
`Waking up'
``The market is waking up to the fact that it's no longer an Australian company,'' said Shane Storey, an analyst at Wilson HTM Investment Group in Brisbane. ``The premium that it's traded at is less appropriate now that most of the earnings are coming from offshore.''
Chief Executive Officer Colin Goldschmidt reiterated his full-year profit growth forecast of as much as 15 per cent, based on average currency values in 2009. Assuming these exchange rates, first-half net income rose 19 per cent to $161.9 million.
``I think the results are generally fine, actually,'' UBS's Goodsall said. ``In several of the markets they're in, they're taking market share.''
Sonic, which operates laboratories in the US, Germany, Switzerland and the U.K., made four acquisitions in those nations during the half year, and bought Antwerp, Belgium-based Medhold NV this month. The company has about $600 million for further purchases, Goldschmidt said in a statement.
