By Greta Rosen Fondahn
(Reuters) – Swedish medical equipment maker Getinge missed forecasts for third-quarter profit and sales on Friday despite strong orders, hit by delivery issues and costs of solving prolonged quality problems.
While the order intake grew for a third consecutive quarter, rising 7.4% organically, temporary delivery disruptions affected the earnings, CEO Mattias Perjos said in a statement.
Getinge last month said industrial inspector TUV Sud had reinstated the European “CE” safety mark for its heart-lung products, but warned supplier and production challenges would hinder deliveries in the third quarter.
“We are back at delivering the products again since the first week of October,” Perjos told Reuters.
Getinge is still working to resolve costly quality problems with some of its heart products, which has squeezed margins and dragged its shares since the second quarter of 2023.
Shares in the company, which also makes ventilators and equipment for operating rooms, were down 6.9% by 1004 GMT.
“Getinge results remain volatile, both from quarter to quarter, but also between divisions within the quarter which is likely to result in lower confidence in forecasts,” J.P.Morgan analysts said in a note.
Getinge’s adjusted earnings before interest, tax and amortisation (EBITA) fell 17% to 903 million Swedish crowns ($85.8 million) in the third quarter, missing analysts’ expectations of 1.03 billion crowns.
Acute Care Therapies – Getinge’s biggest unit which makes heart and intensive care products and has been most affected by the quality issues – saw orders grow more than 10%, while its adjusted EBITA margin fell to 15.8% from 22.5% a year earlier.
Perjos said demand for the unit’s products remained fundamentally good despite the quality problems and ongoing dialogue with the U.S. Food and Drug Administration (FDA).
Getinge said in May it would pause promotional activities for some of its heart and heart-lung products in the U.S., after the FDA advised healthcare facilities to move away from its devices.
Getinge has said its U.S. market share for those products is more than 60%, and Perjos said on Friday there were limited alternatives currently offered by the competitors.
($1 = 10.5279 Swedish crowns)
(Reporting by Greta Rosen Fondahn in Gdansk; editing by Milla Nissi)
