Henry Schein 3Q profit rises, but gives dour view

MELVILLE, N.Y. - Medical-products supplier Henry Schein Inc. said Wednesday third-quarter profit rose 15 percent and that it would cut 300 jobs and close several small facilities amid expectations for a weaker economy.

The Melville, N.Y., company said it earned $68.4 million, or 75 cents per share, up from profit of $59.6 million, or 66 cents per share, a year ago.

Revenue rose 10 percent to $1.65 billion.

"Our worldwide sales growth of almost 10 percent reflects the benefit of our diversified operations," said Chairman and Chief Executive Stanley M. Bergman, in a statement.

International sales rose 31 percent to $538 million. Meanwhile, dental-group sales rose 4.5 percent to $645 million, while medical-group sales fell 4.1 percent to $427 million. Technology and services revenue rose 29 percent to $41 million.

Henry Schein said, however, it expects a slowdown in sales. The company said it will cut about 2.5 percent of its work force worldwide when it closes several facilities. It employs more than 12,000 people and has operations or affiliates in 20 countries.

The company said it expects to record costs associated with the move of between $22 million and $25 million in the fourth quarter. When complete, the company expects to save between $24 million and $27 million.

"Given the recent changes in the economic climate, we expect that the markets Henry Schein serves will continue to grow, but at somewhat slower rates during these challenging economic times," Bergman said. "While we remain confident in our ability to achieve our financial goals, we are taking these actions in light of our view that sales growth for 2009 may moderate somewhat from what we have experienced over the past several years."

The company cut its full-year profit guidance to below Wall Street expectations.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.