Investing.com -- Shares of Tecan (SIX:TECN) crashed on Tuesday after the company slashed its sales forecasts for 2024, citing a challenging first half of the year marked by declines in key financial metrics.
The revised outlook came as Tecan grappled with weaker-than-expected demand across several critical markets.
Tecan plunged 16.2% to CHF 273.60 at 4:50 AM (0850 GMT).
The company now anticipates sales to be flat or decline by a mid-single-digit percentage, a stark contrast to its earlier projection of low single-digit growth. This downward revision reflects ongoing market softness, with recovery prospects now pushed out to 2025.
“We expect currently FX headwinds of around -1.1% for FY24E, hence lc. implied sales growth stands around 1.3%,” said analysts from UBS Global Research in a note.
“At the mid-points of the newly introduced guidance, we expect mid teens downside risk to FY24E consensus EPS estimates, in our view,” they added.
In the first six months of 2024, Tecan's revenue dropped by 13.7% to CHF 467.2 million, down from CHF 541.5 million in the same period last year.
This decline was primarily driven by a 25% reduction in sales within its Life Sciences Business, especially in the biopharmaceutical sector, coupled with a 20% downturn in the Chinese market.
Operating profit reported a sharp decrease, plunging to CHF 26 million in 2024 from CHF 63.1 million in the first half of 2023.
The reduced sales volumes led to underabsorption of fixed costs, compressing the EBITDA margin from 18.7% to 14.5%. Additionally, net profit fell to CHF 22.5 million, compared to CHF 53.2 million in the previous year.
The company now anticipates sales to be flat or decline by a mid-single-digit percentage, a stark contrast to its earlier projection of low single-digit growth. This downward revision reflects ongoing market softness, with recovery prospects now pushed out to 2025.