Sonic shares dive amid earnings fears
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Sonic Healthcare has lifted its first half profit but fears its annual earnings will come in at the lower end of its previous forecasts.
The pathology and radiology provider's net profit increased by 5.4 per cent to $150.6 million in the half year to December 31, from $142.9 million in the previous corresponding period.
Revenue rose 3.4 per cent to $1.7 million from $1.6 million.
Sonic last August said it expected its full year earnings would rise by between five and 10 per cent in 2012/13 above the $624 million achieved in 2011/12.
However, in its latest update on Tuesday, Sonic said fee changes in Germany, fee cuts in the United States and impacts from Superstorm Sandy meant that its full year earnings would come in at the lower end of the guidance range.
"Sonic remains well-placed to benefit for years to come from the ongoing strong underlying growth drivers for medical diagnostic services, not the least of which are ageing populations in each of our markets," chief executive Dr Colin Goldschmidt said in a statement.
Shares in Sonic slumped by more than seven per cent in early trade.
The stock was 99 cents lower at $13.06 at 1014 AEDT.
During the first half, Sonic lifted its revenues and profit despite weak global economic conditions and the impact of the high Australian dollar.
Sonic's Australian and European divisions lifted revenues, while the US business maintained market share despite weak industry growth.
Revenues at the US pathology business fell and were flat in New Zealand.
Sonic's radiology business and its medical centres both lifted revenues.
Sonic lifted its partly-franked interim dividend by one cent to 25 cents a share.