Aryzta AG shares slid the most in two months after the Swiss maker of frozen convenience meals said it will be hit by restructuring costs that will be higher than some analysts expected.
The stock dropped as much as 4.2 percent to 39.76 Swiss francs at 9:10 a.m. in Zurich, valuing the company at 3.7 billion francs ($3.7 billion). The shares have fallen about 20 percent this year.
The one-time cash costs this year will be less than last year’s 88 million euros ($98 million), Zurich-based Aryzta said in a statement Tuesday. That compares with the 35 million euros Alain Oberhuber, an analyst at MainFirst Bank AG, had estimated. The company also said it’s currently in talks with work councils about operational changes that may affect 2 percent of its 18,800 employees.
While the company’s third-quarter sales were “unimpressive,” Jean-Philippe Bertschy, an analyst at Bank Vontobel AG in Zurich, wrote in a note, more concerning are the “significant one-off costs, which demonstrate that Aryzta continues to operate with extremely low visibility.” The company had said to expect no significant one-time costs when it reported first-half earnings in March, he said.
Aryzta also said it can’t provide guidance on the potential costs that may arise from the outcome of the job discussions. Sales rose 0.9 percent in the quarter on an underlying basis, worse than analysts had expected, according to Vontobel’s Bertschy.
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