Sonic Healthcare says it plans to cut costs across its Australian and US operations after warning its full year earnings will come in at the bottom end of earlier forecasts.
The pathology and radiology provider on Tuesday reported a net profit of $150.6 million in the six months to December 31, up 5.4 per cent from $142.9 million in the previous corresponding period.
Revenue rose 3.4 per cent to $1.7 billion, from $1.6 billion.
Last August, Sonic said it expected its full year earnings to rise by between five and 10 per cent in 2012/13 above the $624 million achieved in 2011/12.
However, in its update on Tuesday, the company said fee changes in Germany, fee cuts in the United States and impacts from Superstorm Sandy meant that its full year earnings would come in at the lower end of the guidance range.
The news prompted Sonic's shares to drop $1.125, or 8.01 per cent, to $12.925 at 1340 AEDT.
Chief executive Dr Colin Goldschmidt said that while Australia and Europe posted solid revenue growth, earnings from the US fell an unprecedented two per cent amid difficult trading conditions.
"Whilst our result at the moment, for the first time, is somewhat weaker in the US and it has impacted the whole result of Sonic, we certainly do not take a particular negative view about this," Dr Goldschmidt told analysts.
"I'm confident that we will get through this in probably one or two reporting periods."
Dr Goldschmidt said Sonic already had launched a major cost reduction program across the US and had more unspecified cuts in the pipeline.
"As far as cost measures go in other countries, we've got a lot that we can still do in the US and a lot we can do in Australia," he said.
"I'm not going into fine details of that ... but I can tell you it is quite significant and, depending on conditions, we will adjust our actions.
"We will be doing everything we can to reduce our costs in this low-revenue growth environment and I am confident our earnings will lift as we go forward."
Among the company's best-performers were its imaging and IPN medical centre divisions, where revenue jumped six per cent and 15 per cent, respectively.
Kinetic Health, Sonic's occupational health provider and the largest in Australia, posted a 23 per cent rise in revenue, thanks to growing demand from resources companies.
Dr Goldschmidt said Sonic had no immediate plans for new local acquisitions after buying Healthscope (Western Australia) in October 2012, and would instead focus on potential acquisitions in Europe and the US.
"In Australia, I think the opportunities are probably almost done. The market is almost fully consolidated here," he said.
The chief executive would not comment on the possible outcome of a federal government review on the impact of industry deregulation on competition and rents due in April.
However, he said, Sonic was in a strong position to compete and win under the current conditions.
Sonic lifted its partly-franked interim dividend by one cent to 25 cents a share.