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UPDATE 1-Getinge profit dips less than expected under shadow of quality issues
April 16, 2014 / 11:56 AM / 3 years ago

UPDATE 1-Getinge profit dips less than expected under shadow of quality issues

* Order intake 6.0 bln SEK vs mean forecast 6.3 bln

* Getinge issued profit warning in March

* Sees restructuring costs at 960 mln SEK this year

* Shares marginally higher, in line with broader market (Adds detail, background)

STOCKHOLM, April 16 (Reuters) - Swedish medical technology firm Getinge posted a smaller-than-expected fall in first-quarter core profit on Wednesday and saw restructuring costs for the year more than doubling as it tries to boost quality controls.

The medical technology group issued its third profit warning in just over a year in March as it said it faced more than a year of heavy spending to improve controls following inspections by the U.S. Food and Drug Administration last year.

It said then it was reviewing controls at all manufacturing sites within its Medical Systems unit, which accounts for roughly half of group sales, and that consultants brought in to address the issues would cost about 125 million crowns per quarter for a period of six to seven quarters.

It said on Wednesday restructuring costs in total would swell to 960 million crowns this year.

Besides higher costs for consultants, Getinge has also suffered from a downturn in orders, production problems and challenging currency swings.

It reiterated expectations for a negative currency impact of about 250 million crowns this year and its 6.0 billion Swedish crown ($913 million) order intake for the first quarter was short of analyst forecasts for 6.3 billion.

Earnings before interest, taxes, amortisation and restructuring costs fell to 670 million crowns in the first quarter from a year-ago 792 million. The mean forecast in a Reuters poll of analysts was for 528 million.

Shares in the firm - maker of surgical theatre equipment such as products for heart surgery and anaesthesia - were marginally higher at 1031 GMT, in line with the Stockholm bourse’s blue-chip index.

Getinge, whose competitors include U.S. medical technology groups Medtronic, Stryker and Steris, said its markets in western Europe, which account for roughly a third of its sales, had continued to recover in the first quarter following signs of improvement at the end of 2014. ($1 = 6.5695 Swedish Crowns) (Reporting by Mia Shanley and Johannes Hellstrom; editing by Niklas Pollard)

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