Ansell (ANN) shares will cop a pounding when trading resumes this morning after produced a surprise earnings downgrade at 6pm yesterday, well after the close of trading which saw the local market sold off heavily in a 2% plus or $34 billion crunch.
The company cut its interim and full year profit expectations by around 10%, blaming poor economic conditions for discouraging its customers from buying its protective equipment, and the strength of the US dollar.
The downgraded guidance was released ahead of the full interim results to be released next Monday.
In last night’s statement released Ansell said sales in January had been lower than anticipated “as customers deferred or reduced orders to adjust inventory levels amid a general weakening in the external economic environment.”
"In addition, continued currency and economic volatility presents challenges to forecast visibility, particularly in emerging markets," the company said.
The company said it now expected to report full-year earnings per share in the range of US95¢ to $US1.10. Last August Ansell gave guidance for full-year EPS of $US1.05 to $1.20.
ANN 1Y – Ansell downgrades guidance
Ansell said it expected sales in the six months ended December 31 to be down 7% to $US785 million on the prior corresponding period. Although the figure would be "on par… after adjusting for currency changes."
That guidance was lower than expected and the shares plunged more than 21% on August 10 in their biggest one day fall since the big stock market crash in 1987.
They ended down 15.8% at $20.84. Yesterday they closed down 1.6% at $18.65, out performing the 2.4% slump in the wider market.
The shares are down 13% so far in 2016 and 38% in the past year. They will go much lower today.
