Getinge Says Slow Europe Capital-Goods Market Hurt SalesKim McLaughlin
Getinge AB, a Swedish maker of sterilization systems sold in more than 100 countries, said fourth-quarter orders and revenue were hurt by weakening demand in Europe. The stock dropped the most in almost four years.
Full-year sales contracts received and invoicing rose by almost 3 percent, excluding currency fluctuations and acquisitions, which was lower than the expected growth, Getinge, based in the Swedish town with the same name, said in a statement today. Chief Executive Officer Johan Malmquist forecast a comparable rate of revenue increases this year.
“We are maintaining that 2013 will be similar or a little bit better than 2012,” he said on a conference call. “Now, of course, 2012 has been worse than we previously expected.”
Malmquist said a traditional flow of sales late in the month of December, when hospitals usually rush to spend remaining annual budgets, hadn’t materialized, in a surprise to the Swedish manufacturer which said on Oct. 17 that it was predicting a “continued favorable earnings outlook” for 2012.
Getinge dropped as much as 10 percent to 194.4 kronor, the steepest intraday decline since March 24, 2009, and was trading down 9.2 percent at 4:29 p.m. in Stockholm. That pared the stock’s gain in the past 12 months to 13 percent.
The stock, which has been seen as a “very stable defensive play in turbulent markets” will be under pressure in coming months, Patrik Ling, an analyst at Nordea Bank AB in Stockholm, said in a report to clients. Ling has a sell recommendation on the stock.
Pretax profit was about 3.6 billion kronor ($555 million) last year, excluding one-time acquisition and restructuring costs of 170 million kronor related to the purchase of Kinetic Concepts Inc.’s TSS division, Getinge said. The average estimate in a Bloomberg survey of 13 analysts was for pretax profit of 3.71 billion kronor.
The order book at the start of this year looks “a bit better” than at the corresponding time in 2012, Malmquist said. At the same time, the company had “some slippage” in sales at the end of last year into 2013.
Getinge will publish full-year 2012 results on Jan. 25.