Henry Schein shares dive on weak outlook

NEW YORK - Shares of dental-products provider Henry Schein Inc. fell Wednesday after the company warned that a weaker sales market will hurt revenue in the fourth quarter, prompting it to cut jobs.

Its shares fell $4.62, or 10 percent, to close at $41.63.

The Melville, N.Y., company, which distributes a range of dental products from X-ray equipment to surgical tools, plans to cut 300 jobs, or 2.5 percent of its work force, in anticipation of a weak market. It employs more than 12,000 people and has operations or affiliates in 20 countries.

Henry Schein cut 2008 profit guidance to between $2.94 and $2.96 per share, down from prior guidance of $2.93 to $3 per share. Analysts polled by Thomson Reuters expect profit of $2.97.

It also set 2009 guidance of $3.27 to $3.36 per share, below Wall Street forecasts for $3.39 per share.

The cut guidance followed a positive third-quarter financial report, where profit and revenue met forecasts.

Robert W. Baird analyst Jeff D. Johnson, brushed off the guidance, reaffirming a "Outperform" rating and a $62 price target.

"We worry some investors may be disappointed with third-quarter dental-equipment organic growth and 2009 guidance, but both met our expectations and, in our opinion, reflect Henry Schein's ongoing ability to deliver healthy growth despite the challenging environment."

The company continues to gain ground in its core North American dental business, he added, through a combination of improved operating performance and exclusive distribution agreements.

Goldman Sachs analyst Randall Stanicky reaffirmed a "Neutral" rating, saying the company's initial 2009 outlook reflects a tough environment.

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