(Reuters) – Henry Schein lowered its annual profit forecast on Tuesday as the dental and medical equipment distributor warned of a slower recovery from a cyberattack that was disclosed by the company in October last year.
The company’s shares were down 7.3% to $64.50 in premarket trading.
Henry Schein had taken some of its systems offline, notified authorities and engaged experts after the cybersecurity breach disrupted its manufacturing and distribution businesses.
The incident had a residual impact on the company’s financial performance this year, with its second-quarter revenue coming in at $3.14 billion, below analysts’ estimates of $3.27 billion, according to LSEG data.
“We are experiencing improving sales trends in our distribution businesses, however, the pace of recovery in these businesses since the cyber incident late last year has been slower than anticipated,” CEO Stanley Bergman said.
Henry Schein cut its annual profit forecast to between $4.70 and $4.82 per share from its prior view of $5 to $5.16 per share. Analysts were expecting a profit of $5.06.
The company said it now expects full-year sales to increase 4% to 6%, compared with its previous forecast of 8% to 10% growth.
Sales at Henry Schein’s dental unit fell 1.7% to $1.92 billion in the second quarter, below estimates of $1.99 billion.
Sales at its medical segment also dropped 5% to $998 million, missing estimates of $1.07 billion.
On an adjusted basis, Henry Schein earned $1.23 per share in the second quarter, compared with estimates of $1.22.
The company, which supplies products such as dental implants and personal protective equipment, announced a restructuring plan on Tuesday to save between $75 million and $100 million annually.
Henry Schein expects to record charges in the second half of 2024 and in 2025, details of which were not disclosed, mainly due to severance and facility-related costs.
(Reporting by Mariam Sunny in Bengaluru; Editing by Shreya Biswas)
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