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UPDATE 1-Getinge predicts earnings boost from emerging markets
July 11, 2012 / 8:12 AM / in 5 years

UPDATE 1-Getinge predicts earnings boost from emerging markets

* Q2 pretax profit 716 mln SEK vs consensus 743 mln

* Organic order intake 8.2 pct

* Repeats favourable earnings outlook for 2012

* Sees slow North American improvement, West Europe sluggish

* Shares up 4.3 pct (Adds detail, background, analyst, shares)

By Anna Ringstrom and Veronica Ek

STOCKHOLM, July 11 (Reuters) - Getinge showed the benefits of its emerging market focus on Wednesday when the medical technology group said demand from these countries would give a big boost to earnings growth for the rest of the year.

“Orders received remained very strong in the markets outside Western Europe and North America, which comprise a growing portion of the group’s sales,” Getinge said after posting a smaller than expected second quarter profit.

Getinge, whose products range from surgical tables and anaesthesia systems to heart-lung support equipment, stood by its outlook for higher organic order growth in 2012 than in 2011, and for profit growth.

“Expectations of a significant improvement in earnings growth during the second half of the current year are based on strong orders received during the second quarter,” it said.

Getinge’s shares rose 4.3 percent to a one-month-high by 0730 GMT.

Organic order intake growth at the Swedish maker of surgical theatre equipment was 8.2 percent in the quarter. At Getinge’s biggest business, Medical Systems, organic orders grew 15.7 percent.

The company had issued a profit warning in April for the first quarter but at that time had also repeated its full-year guidance, saying individual quarters and business areas could show large variations in both volume trends and earnings growth.

“Order intake is very strong, especially for Medical Systems and especially in emerging markets. The outlook isn’t changed, but this order intake makes it more credible,” Swedbank analyst Johan Unnerus said.

“Getinge remains very dependent on emerging markets since the mature markets, North America as well as Europe, remain very subdued,” he said.

Getinge predicted a slow improvement this year in the North American market, while Western Europe would remain sluggish. In other markets, Getinge predicted a continued favourable level of demand.

North America and Asia each account for nearly a third of Getinge’s sales, Europe a bit over a third.

Second-quarter pretax profit grew to 716 million crowns ($103 million) from a year-earlier 654 million, against a consensus forecast in a Reuters poll for 743 million.

$1 = 6.9810 Swedish crowns Reporting by Stockholm Newsroom. Editing by Jane Merriman

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