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UPDATE 1-Getinge says quality control costs to weigh on earnings
March 7, 2014 / 8:13 AM / 4 years ago

UPDATE 1-Getinge says quality control costs to weigh on earnings

* Sees Q1 pretax profit of about 160 mln SEK

* Profit estimate well below market expectations

* Getinge’s third profit warning in just over a year (Adds detail, background)

STOCKHOLM, March 7 (Reuters) - Medical technology group Getinge said on Friday its first quarter earnings would be hit by an adverse mix of higher costs for consultants, lower invoicing, production problems and challenging currency swings.

The Swedish company, which has logged a history of profit warnings after issuing two only last year, said in a statement its quarterly pretax profit was expected at about 160 million Swedish crowns ($25 million), down from a year-ago 252 million.

The estimated outcome was far below the SmartEstimate of 600 million crowns forecast by analysts, according to Reuters data.

Getinge, a maker of surgical theatre equipment such as products for heart surgery and anaesthesia systems, has been seeking to fix quality issues following inspections by the U.S. Food and Drug Administration (FDA) last year.

The company said it now expected costs for consultants to address the concerns to total about 125 million crowns per quarter for a period of six to seven quarters.

Getinge said output at one of its units had been disrupted due to a change in material specifications for a supplier and would dent earnings to tune of 60 million crowns while invoicing in its Medical Systems business, which accounts for half of group sales, had been lower during the first quarter.

The group said currency swings had also grown more challenging.

$1 = 6.4053 Swedish crowns Reporting by Niklas Pollard and Johannes Hellstrom. Editing by Jane Merriman

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