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Investing.com - Shares in Carl Zeiss Meditec AG (ETR:AFXG) slipped in European trading on Thursday after the German optical technology group posted weaker-than-anticipated fiscal third-quarter core earnings and warned that sweeping U.S. tariffs would dent its annual results and lead to higher prices.
In a statement, Zeiss flagged that it had to contend with headwinds from the levies during its latest three-month period, although it was still able to achieve organic growth and earnings expansion thanks to strength at its ophthalmology strategic business unit.
Still, group-wide third-quarter earnings before interest, taxes, and amortization came in at 62 million euros, missing consensus expectations of 65 million euros, according to Stifel.
Revenue in its Americas region, which includes the United States, sank by 7.8% versus a year ago to 140.3 million euros, but was offset by strength in demand in Europe and Asia. Consolidated revenues came in at 539.4 million euros, an uptick of 1.9% year-over-year.
Zeiss said it continues to expect "moderate growth" in revenue in its current fiscal year, with operating profit margin expected to be "stable or slightly higher" than the prior period.
However, it noted that the introduction of a 15% U.S. tariff on imports from the European Union will "have a negative impact on earnings in the current fiscal year," adding that this impact will be passed on to consumers through "targeted pricing policy."
Further devaluation of the U.S. dollar and Asian currencies like China’s yuan, Japan’s yen, and South Korea’s won, has not been included in its full-year outlook and represents "an additional risk," Zeiss warned.
In a note, analysts at Stifel said Zeiss’ decision to reiterate its guidance suggests "steep" improvement in operating income in the group’s fourth quarter.