Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Richter Tumbles Most in a Year on Profit Miss, Sales Forecast

Don't Miss Out —
Follow us on:

Feb. 5 (Bloomberg) -- Gedeon Richter Nyrt., Hungary’s largest drugmaker, suffered its biggest daily decline in more than a year after fourth-quarter profit missed analysts’ estimates and the company said revenue may decline this year.

The shares fell as much as 4.1 percent and closed 3.8 percent lower at 4,357 forint in Budapest, the biggest decline since Nov. 2012. The stock, which closed at a month-low, has lost 1 percent this year after climbing 21 percent in 2013.

Net income slumped 61 percent to 4.8 billion forint in the fourth quarter, missing the 12 billion-forint mean estimate in a Bloomberg survey of five analysts. Sales grew 8.9 percent to 91 billion forint and the company posted financial losses of 1.7 billion forint and a further 1.5 billion-forint writedown after terminating a research project, according to its regulatory statement today.

“Richter had a very weak quarter, with only revenues meeting estimates,” Endre Kosa, a Budapest-based analyst at KBC Groep NV’s brokerage said by phone today. Costs may continue to weigh on profitability, he said.

Richter, which sells most of its products abroad, expects revenue to shrink in 2014, with the scope of the decline depending on foreign exchange rate moves, Chief Executive Officer Erik Bogsch told reporters in Budapest today.

Investors expect revenue to increase this year and in 2015 and the company’s guidance is “a setback,” KBC’s Kosa said. Richter tends to be conservative with forecasts and investors may see an upward revision later this year, he said.

The share’s recommendation was lowered to “underweight” from “equal weight” at Concorde Securities after the company issued its revenue guidance and earnings report. Hungary’s largest brokerage also cut its end-2014 price target for the stock to 4,400 forint from 4,700 forint.

The company’s short-term outlook is “lackluster,” particularly with the ruble’s recent weakness and the economic toll of political turmoil in Ukraine, analyst Attila Vago said in an e-mailed report.

To contact the reporters on this story: Marton Eder in Budapest at meder4@bloomberg.net; Edith Balazs in Budapest at ebalazs1@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.