COPENHAGEN (Reuters) - Danish healthcare products maker Coloplast issued its third profit warning this year after setting aside 3 billion Danish crowns ($448 mln) for a U.S. lawsuit, sending its shares 7 percent lower.
Coloplast slashed its full-year earnings before interest and tax (EBIT) margin to 11 percent from 32 percent in local currencies after it was forced to raise the amount set aside to settle legal claims related to its mesh products designed to treat the collapse of pelvic organs and urinary incontinence.
The company had already set aside 1.5 billon Danish crowns, taking the total provision to cover the costs to 4.5 billion.
“Three profit warnings this year have dampened sentiment, but we think our thesis remains intact given the one-off nature of the events behind the warnings and what is ultimately a limited impact to our valuation,” Barclays analysts said in a note.
“This amount exceeds our expectations, although we saw a risk of the outcome being worse than the initial provision of
1.0 billon Danish crowns plus insurance of 500 million Danish crowns,” Nordea wrote in a note to clients.
Coloplast had issued two profit warnings this year due to the lawsuit and weak sales in Russia.
The company said the provision is not expected to have an impact on the dividend for 2014/15.
($1 = 6.6895 Danish crowns)
Reporting by Annabella Pultz Nielsen: editing by Sabina Zawadzki