November 2, 2017 / 7:55 AM / a year ago

UPDATE 1-Fresenius says Akorn troubles could continue into next year

* Says Akorn Q3 below expectations

* Says 2018 Akorn targets challenging

* Q3 group adj net income 423 mln euros, up 11 pct

* Fresenius confirms 2017 outlook (Recasts, adds Akorn)

By Ludwig Burger

FRANKFURT, Nov 2 (Reuters) - German healthcare group Fresenius SE said on Thursday that weakness at Akorn , the U.S. maker of liquid generic drugs it has agreed to buy, could continue into next year but the deal was still worth it over the longer term.

The 2018 targets for Akorn, which Fresenius plans to take over at the end of this year, were "challenging", the diversified drugmaker said in presentation slides posted on its website after the release of its quarterly results.

Akorn's third-quarter performance was "below expectations," Fresenius added. It had previously described Akorn's weakness as a result of volatility and swings in business.

Akorn late on Wednesday reported quarterly operating income slumped to $9 million from $87 million a year earlier, citing supply disruptions and competition for a range of products such as Ephedrine injection against low blood pressure under anaesthesia and Lidocaine anaesthetic ointment.

Fresenius previously said Akorn, which it agreed to buy in April, would generate $380-$420 million in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) under its leadership in 2018.

The German group, controlled by a charitable trust, reaffirmed the logic behind the deal, which is to offer a wider choice of drugs to hospitals and pharmacies.

Fresenius said its own third-quarter adjusted net income gained 11 percent on higher drug sales and helped by the addition of Spanish hospitals chain Quironsalud.

Quarterly net income adjusted for one-offs rose to 423 million euros ($493 million), slightly below the average estimate of 431 million euros in a Reuters poll of analysts.

For 2017, it still expects adjusted net income to grow by 19 to 21 percent, excluding the effect of currency swings.

Fresenius Medical Care, Fresenius SE's separately listed kidney dialysis business, reported third-quarter earnings before interest and tax was flat at 609 million euros, held back by disruptions due to hurricanes in the United States and slightly below the analyst consensus.

$1 = 0.8581 euros Reporting by Ludwig Burger; Editing by Maria Sheahan and Mark Potter

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