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UPDATE 1-U.S. healthcare confusion hits packaging firm Gerresheimer
April 6, 2017 / 7:50 AM / 5 months ago

UPDATE 1-U.S. healthcare confusion hits packaging firm Gerresheimer

* North American pharma customers reluctant to place orders

* 2017 revenue seen at lower end of guidance range

* Shares drop almost 6 percent (Adds details on outlook, shares, analyst comment)

FRANKFURT, April 6 (Reuters) - German drugs-packaging firm Gerresheimer on Thursday said its major pharmaceutical customers had been more cautious in placing orders due to uncertainty over the new U.S. administration’s policies, sending its shares lower.

Revenues at Gerresheimer’s business division that makes glass bottles and vials for drugs fell 2.9 percent in its fiscal first quarter through the end of February as sales in North America slipped.

“Greater uncertainty with regard to the new U.S. government triggered a relatively pronounced reticence among a number of large pharma customers to place orders,” Gerresheimer said in a statement, adding that European cosmetic glass sales had risen.

President Donald Trump has promised to increase competition in the pharmaceutical industry without giving details, while promised healthcare reform has been delayed, leaving drugmakers uncertain as to how pricing and demand may be affected.

Overall, Gerresheimer’s revenues were down more than 5 percent at 302.8 million euros ($323.1 million) in the quarter, missing analyst consensus of 307 million euros in a Reuters poll.

The group said it expected full-year revenues at the lower end of its forecast range of 1.405 billion to 1.455 billion euros. Analysts on average see 2017 revenues of 1.43 billion euros.

Shares in Gerresheimer fell 5.9 percent in early trading to the bottom of the German mid-cap index, which slipped 0.4 percent.

“The fact that the management currently sees just the lower end of the FY revenue guidance should not come as a major negative surprise after the expected slow start to the year,” said DZ Bank analyst Sven Kuerten, reiterating his “buy” rating.

Gerresheimer reiterated that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) should rise to around 320 million euros this year from 308 million in 2016, after a 6 percent slide in the first quarter. ($1 = 0.9366 euros) (Reporting by Maria Sheahan and Georgina Prodhan; Editing by Victoria Bryan)

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