Carl Zeiss Meditec shares sink on profit warning

Investing.com - Shares of Carl Zeiss Meditec AG slumped in early European trading on Thursday after the German optical technology firm warned that its fiscal first-quarter earnings will be "clearly below" its past year.

The company added in a statement that its guidance for the current fiscal year "will likely not be achieved" as well.

Jena, Germany-based Carl Zeiss Meditec said preliminary revenue in the three months until the end of December had come in at 467 million euros, compared to 490 million euros a year earlier, due largely to negative currency effects.

Preliminary operating profit -- defined by the group as earnings before interest, taxes and amortization of intangible assets -- came in at 8 million euros.

The total had stood at 35 million euros in the corresponding period a year before, when Carl Zeiss Meditec -- whose products include eye examination tools and medical lasers -- said it had benefited from "exceptionally strong equipment deliveries." This "resulted in a softer start to the new fiscal year," the company said.

Meanwhile, an upcoming new nation-wide volume-based procurement tender -- or competitive bidding process -- for Carl Zeiss Meditec’s bifocal intraocular business in China "is expected to cause significant price erosion due to an increased level" of competition in the country. The firm said last month that it had withdrawn from the process.

It pointed as well to the impact of a later start to the seasonal peak for refractive treatment packs by hospitals in China due to the late timing of the Chinese New Year holidays.

At the same time, an "increasingly weak" investment environment in the Americas, stemming from heightened geopolitical has weighed on revenue, Carl Zeiss Meditec said.

"Given the current high level of uncertainties surrounding geopolitical developments, trade barriers and regulatory changes, previous FY 2025/26 guidance will likely not be achieved and is currently under review," the company flagged.

Carl Zeiss Meditec said its full quarterly earnings will be released on February 12.

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