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UPDATE 1-Getinge Q1 beats expectations as savings kick in, shares soar
April 25, 2017 / 12:31 PM / 8 months ago

UPDATE 1-Getinge Q1 beats expectations as savings kick in, shares soar

* Q1 adjusted EBITA 818 mln SEK vs consensus 689

* First profit beat in 2 years helped by savings programme

* Sees PPAC unit spin-off costs of 400-500 mln SEK 2017

* Says can’t rule out further costs related to FDA probe (Adds detail, background, share price)

STOCKHOLM, April 25 (Reuters) - Swedish medical technology firm Getinge reported quarterly core profit above expectations for the first time in eight quarters as cost cuts bolstered profitability, sending its shares sharply higher on Tuesday.

New CEO Mattias Perjos, a sector outsider who took on the job in March after his predecessor was fired last year, stood by a cautious outlook for a slight increase in organic sales for the full year, after a decline in 2016.

First-quarter profit before amortisation and restructuring, acquisition and integration costs was up 32 percent from a year ago, at 818 million crowns ($93 million) against a mean forecast in a poll of analysts of 689 million.

The Swedish company is coming out of a turbulent 2016, with several forecast cuts and management changes amid a weak performance at its Surgical Workflows division.

Getinge is also in the midst of a large savings programme, under investigation by U.S. authorities into quality controls at some of its plants, and hopes to spin off of its smallest division, Patient & Post-Acute Care, by early 2018.

It said on Tuesday preparations for the spin-off were proceeding according to plan, adding that related costs would be 400-500 million crowns in 2017.

It will post new targets in the second half of this year in connection with a final proposal on the spin-off.

Getinge shares rose 11 percent by 1153 GMT, on track for their biggest daily increase since January 2009 and reaching their highest level since August.

The firm said its work to improve quality controls at plants as required by the U.S. Food and Drug Administration was proceeding as planned in the United States. At its Hechingen, Germany, plant the situation was more complex.

“Getinge cannot, at the current time, rule out that additional sanctions will be made or costs incurred,” it said.

$1 = 8.8138 Swedish crowns Reporting by Anna Ringstrom and Rebecka Roos; editing by Niklas Pollard and Louise Heavens

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