Sonic Healthcare (ASX:SHL) share price down 3% despite surging FY21 profits

Sonic Healthcare shares are selling off despite a triple digit surge in net profit. Here’s why.
The post Sonic Healthcare (ASX:SHL) share price down 3% despite surging FY21 profits appeared first on The Motley Fool Australia. –

The Sonic Healthcare Limited (ASX: SHL) share price is under pressure on Monday after the company released its FY21 results.

At the time of writing, shares in the medical diagnostics company are down 3.22% to $41.45.

What happened to the Sonic Healthcare share price?

Sonic Healthcare delivered a seemingly positive FY21 result with highlights including:

Revenue of $8.8 billion, up 28% on the prior corresponding period (pcp).

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) lifting to $2.6 billion, up 81%.
Net profit surging to $1.3 billion, up 149%.

Its shares opened relatively flat, down 0.19% to $42.75, before sellers took control, dragging the Sonic Healthcare share price down 4.41% to an intraday low of $40.94.

Did the results contain any negative surprises?

Sonic Healthcare said that its financial performance has been enhanced by COVID-19 testing revenue across its ~60 laboratories around the world.

The business flagged that COVID-19 PCR volumes were lower in the second half of the year versus the first half.

In the new financial year, it cited that volumes have been increasing with the spread of the Delta variant.

Looking ahead, the company said that it is not providing any earnings guidance for FY22 due to “COVID-19 related unpredictability”.

Encouragingly, the company’s base business (excluding COVID testing) grew by 6% versus FY20 and by 4% compared to FY19.

Sonic Healthcare highlighted that its base business “has become increasingly resilient to impacts of pandemic waves and benefits from geographical and business diversification”.

That said, the volatility in COVID-19 testing revenues could be the catalyst behind today’s selloff.

Another thing to consider is that the Sonic Healthcare share price closed at record all-time highs last Friday, 20 August.

Investors might be using today’s news as an opportunity to take profits, despite what looks like an encouraging full-year result.

The post Sonic Healthcare (ASX:SHL) share price down 3% despite surging FY21 profits appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sonic Healthcare right now?

Before you consider Sonic Healthcare, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sonic Healthcare wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

ASX 200 midday update: NIB sinks and Sonic falls on full year results

Sonic Healthcare (ASX:SHL) share price on watch after 149% profit boost in FY21
5 things to watch on the ASX 200 on Monday

How did the Sonic Healthcare (ASX:SHL) share price respond last earnings season?
2 high quality ASX dividend shares named as buys

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!