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UPDATE 1-Getinge stands by growth outlook as Q2 profit undershoots
July 15, 2014 / 7:00 AM / 3 years ago

UPDATE 1-Getinge stands by growth outlook as Q2 profit undershoots

* Q2 EBITA profit 905 mln SEK vs Reuters poll forecast 1.012 billion

* Order intake 6.65 bln SEK vs poll forecast 6.81 bln

* Repeats forecast of organic sales growth of around 4 pct in 2014 (Adds detail, background)

STOCKHOLM, July 15 (Reuters) - Swedish medical technology firm Getinge said its short-term profit outlook was uncertain as it posted a surprise fall in second-quarter core profit on Tuesday and repeated its sales growth forecast for the year.

Getinge said in March that heavy spending to improve manufacturing quality controls in its biggest business area following inspections by the U.S. Food and Drug Administration would weigh on profits for more than a year, sending its share down by 20 percent in one day.

In late May, the firm cancelled an investor day on short notice because of higher uncertainty over the financial impact of potential actions by the FDA and raised the possibility of fines or restrictions on what kind of products it can sell in the United States. Getinge said then it may take months get clarity on the outcome.

Earnings before interest, taxes, amortisation and restructuring costs fell to 905 million Swedish crowns ($133 million) from a year-earlier 1.004 billion. The mean forecast in a Reuters poll of analysts was for 1.012 billion.

The company, whose competitors include U.S. medical technology groups Medtronic, Stryker and Steris , said negative currency transaction effects, an unfavourable product and market mix, and costs to improve its quality controls had weighed on profits.

“The operational impact of the activities currently being conducted to strengthen Medical Systems’ quality management system and the outcome of the dialog in progress with the U.S. FDA are creating uncertainty regarding the short-term earnings outlook,” Getinge said in a statement.

Order intake was 6.65 billion crowns, lower than the average forecast of 6.81 billion in the Reuters poll, and declined by 0.5 percent organically in the quarter.

Getinge repeated it expected sales growth in 2014, adjusted for acquisitions and currency swings, to be around 4 percent and forecast demand in markets outside North America and Western Europe to improve during the rest of the year after a period of weak demand. ($1 = 6.7919 Swedish Crowns) (Reporting by Sven Nordenstam; Editing by Alistair Scrutton)

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