May 5, 2020 / 6:11 AM / 20 days ago

Prospect of rebound in orders lifts Siemens Healthineers shares

FRANKFURT (Reuters) - Shares in Siemens Healthineers (SHLG.DE) gained on the prospect of medical imaging and diagnostics orders bouncing back later this year, even as it abandoned its full-year profit guidance citing uncertainties from the COVID-19 pandemic.

FILE PHOTO: Siemens Healthineers headquarters is pictured in Erlangen near Nuremberg, Germany, October 7, 2016. REUTERS/Michaela Rehle

The German group will likely not achieve its previous outlook for the year through September for growth in adjusted earnings per share of 6% to 12%, but revenue growth should return some time before June, Healthineers said on Tuesday.

“The focus on COVID-19 patients made customers delay purchasing decisions, which should show up as pent-up demand in the future,” Chief Executive Bernd Montag said.

Sales of diagnostic products and reagents are slipping as patients avoid check-ups for conditions not related to the virus and Montag said hospitals were in no mind now to purchase big-ticket items such as MRI scanners, predicting lower sales in the April-to-June quarter.

“When it comes to orders, I am optimistic ... it will come back to normal,” he added.

The German maker of x-ray, ultrasound and MRI scanners said its adjusted earnings before interest and tax (EBIT) edged 6% higher to 659 million euros ($718 million) in the January-March period, beating the average estimate of 563 million in an analyst survey posted on the company’s website.

That was helped by growth in the CT scanner business and demand for other molecular imaging machines.

Shares in Healthineers were up 5.8% at 42.06 euros by 0837 GMT, after jumping as much as 8.5% to a three-month high.

“We are encouraged that management expects a period of abnormally high growth out of the recovery owing to pent-up demand,” Scott Bardo, an analyst at Berenberg Bank, said.

Healthineers laid out plans last month to launch an antibody test to identify past coronavirus infections, eyeing output of more than 25 million tests per month from June as it competes with rivals Roche (ROG.S) and Abbott (ABT.N).

Berenberg’s Bardo said that would likely lift earnings, after Healthineers said in an analyst call that the tests would be priced at a “low single-digit dollar amount” apiece.

Reporting by Ludwig Burger; Editing by Michelle Martin, Kirsten Donovan

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