Ansell shares have slid more than nine per cent after the protective gloves and clothing maker warned that its annual earnings guidance could fall, citing uncertainty over costs and tariffs on US imports.
The company says its adjusted earnings per share could fall by five to six US cents from its guidance range of $US1.00 to $US1.12 for 2018/19 if raw material costs continue to increase and tariffs introduced on US imports are implemented at the higher levels proposed.
Market consensus for full-year adjusted EPS was $US1.12 ahead of Tuesday’s outlook update, according to investment bank Citi.
Ansell said plans are being drawn up in a bid to “substantially offset” the external headwinds by the end of June, but some short term negative impact is possible.
Acquisitions or share buybacks may cap the downside in adjusted EPS in 2018/19, the company added.
The weaker outlook took a toll on Ansell shares, which were down $2.68, or 9.6 per cent, to $25.13, at 1332 AEST, in a slightly higher Australian share market.
It also overshadowed a tripling of net profit for the year to June 30.
Ansell’s net profit surged to $US484.3 million ($662.4 million) from $US147.7 million a year earlier, bolstered by a US$345 million gain on the sale of its condoms business, Sexual Wellness.
Sexual Wellness – which also makes lubricants, devices and fragrances – contributed $US57.7 million of sales and a profit after tax of $US0.7 million prior to being sold for $US600 million to a Chinese consortium last September.
Underlying earnings before interest and tax rose nine per cent to $US193.1 million for the year ended June 30 from, missing consensus of $US200 million, according to Citi, which had forecast $US201 million.
Total sales fell 0.8 per cent to $US1.55 billion, on account of the sale of its Sexual Wellness business.
The group will pay a final dividend of 25 US cents a share, up from 23.75 US cents a year earlier.
ANSELL’S NET PROFIT SURGES
* Net profit surged to $662.4m($US 484.3) from $202.2m
*Sales fell 0.8pct to $2.12b
*Dividend up 5.3pct to 34 cents a share