Agfa HealthCare reported a 4.5% increase in its first-quarter 2005 sales, to 305 million euros ($388 million U.S.), compared with 292 million euros ($371 million) during the first quarter of fiscal 2004. However, excluding the effects of recent acquisitions and the strengthening of the euro, the firm said that sales showed a 5.1% decrease when compared with the same period last year.
The healthcare business unit of Mortsel, Belgium-based Agfa explained that in its first quarter (end-March 31) sales were affected by a more pronounced seasonality in healthcare IT, price erosion, an overall subdued trading environment in the U.S., and fewer billing days. The company noted that weak sales of January and February were followed by stronger sales in March, consistent with a pattern seen in 2004.
Agfa said that HealthCare's operating profit was 26.2 million euros ($33.3 million) for the period, a sharp downturn compared with the 36.4 million euros ($46.3 million) shown in the first quarter of 2004. In addition, the company reported that its return on sales for the unit was 8.6%, a marked decline compared with the 12.5% percent it saw in the first quarter of 2004.
The firm attributed the decline to lower sales, price erosion, and higher raw materials costs. Agfa remained upbeat about its performance expectations for the 2005 fiscal year, despite its slow first-quarter start.
Agfa said that a more focused business portfolio, the recent acquisition of Bonn, Germany-based healthcare IT developer GWI in January, and the announced acquisition of Westerly, RI-based cardiac PACS firm Heartlab, are major steps in implementing its strategy to consolidate its position in the radiology market segment, expand in other hospital departments, and grow its enterprise-wide IT base.
By AuntMinnie.com staff writers
May 12, 2005
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