(Bloomberg) -- Tecan Group AG shares slumped the most in two decades after the Swiss maker of laboratory equipment cut its guidance for the year, citing reduced spending by pharmaceutical companies and a plunge in sales in China.
Tecan now sees sales falling by as much as a mid-single-digit percentage, versus a previous forecast for an increase, the company said in a statement Tuesday. The company also said its profit margin will be lower than forecast, and first-half results missed market expectations. The stock tumbled up to 18% in Zurich, the biggest intraday decline since September 2004.
“Most investors that we spoke to expected a slight consensus miss and reiterated FY24 guidance, so today’s print is disappointing,” Berenberg analyst Odysseas Manesiotis wrote in a note to clients. This will leave “many investors to question why the group did not communicate any of the weakness announced today earlier in the year.”
Tecan shares soared during the pandemic, with its automation technology being used in Covid-19 testing. But the stock has struggled in recent years amid a challenging environment for life-science companies.
Estimates for Tecan’s earnings before interest, taxes, depreciation, and amortization are likely to be cut by at least 10% for the year, said ZKB analyst Daniel Jelovcan. “The weak result surprised even the pessimistic market participants,” he said in a note.
--With assistance from James Cone.
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