November 30, 2017 / 12:30 PM / 16 days ago

UPDATE 1-Elekta delays order target for new radiation therapy machine

(Adds company comment, detail, background, shares)

By Anna Ringstrom

STOCKHOLM, Nov 30 (Reuters) - Sweden’s Elekta pushed back its order target for a new radiation therapy machine which is meant to drive its future sales growth on Thursday as it reported higher quarterly core earnings than expected.

Shares in Elekta fell this month after it announced delays to its magnetic resonance radiation therapy machine Unity and said it now expected European health and safety certification towards the end of the first half of next year rather than late 2017.

Chief Financial Officer Gustaf Salford said Elekta was now also delaying its application for approval of Unity by the U.S. Food and Drug Administration to late in the second half of 2018.

“With the shift in CE mark and FDA submission, we adjust our target for the first 75 orders accordingly to the first half of calendar year 2020,” Elekta said.

It previously aimed to generate 75 orders for Unity, which is has not yet launched commercially, by the end of 2019. To date, it has received 18 orders.

Chief Executive Richard Hausmann told a conference call the delay was caused by the discovery of an issue with the machine’s firmware, or embedded software, and that he still expected the system to be a sales growth driver in 2018.

Elekta reported a 30 percent year-on-year jump in operating profit before interest, tax, amortization, one-offs and bad debt losses for the three months through October, its fiscal second quarter, to 509 million crowns ($61 million), against a mean forecast of 432 million in a Reuters poll of analysts.

Shares in Elekta, whose main rival is Varian Medical Systems , were up 0.9 percent at 1157 GMT. So far this year they have fallen by 12.3 percent, against a 2.3 percent rise for the STOXX Europe 600 Health Care Index ($1 = 8.3651 Swedish crowns) (Reporting by Anna Ringstrom; editing by Niklas Pollard and Alexander Smith)

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