Getinge: Resolving FDA beef less costly than thought

(Reuters) — Getinge (PINK:GETI B) last week reported its biggest quarterly order intake increase for almost 2 years, saying costs to resolve U.S. regulatory problems would be lower than previously expected.

The firm has seen its profit margins eroded in recent years by slower sales growth, price pressure and quality control problems in the U.S.

Order intake was 7.4 billion Swedish crowns ($909 million) in the 3rd quarter, above a mean forecast of 7.2 billion in a Reuters poll of analysts. That represents a 5.2% rise from the same period a year before, on a like-for-like basis, the biggest increase since the 4th quarter of 2013.

“We saw, for example, continued increased demand on the North American market during the quarter, which is gratifying since it is one of our most important markets,” Getinge said.

The company also said it now expected costs related to an agreement with the FDA over quality control issues at manufacturing sites to be 375 million crowns, down from its previous estimate of 500 million.

Earnings before interest, taxes, amortisation and restructuring costs fell about 10% to 828 million Swedish crowns. The mean forecast in the Reuters poll of analysts was 886 million.

Getinge repeated it expected sales growth to improve in 2015.

Last month Getinge revealed a major overhaul that will see its 3 divisions merge into 1 by the beginning of next year, as it targets organic sales growth of 2% to 4% over the next few years.

 

($1 = 8.1443 Swedish crowns)

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