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Investing.com -- Draegerwerk (ETR:DRWG) stock surged 12% following the company’s release of preliminary third quarter results showing robust growth across key metrics.
The German medical and safety technology company reported a 6.9% increase in orders at constant currencies for the third quarter, with sales rising even more impressively at 10.1%. The company’s EBIT (earnings before interest and taxes) more than doubled during the period, demonstrating significant operational leverage from the strong top-line performance.
Both of Draegerwerk’s main divisions contributed to the strong performance. The Medical division saw orders increase by 5.4% at constant currencies, while the Safety division posted an 8.8% growth. Sales followed a similar pattern with Medical growing 10.2% and Safety rising 9.9%.
The company’s gross margin expanded by 210 basis points, and management noted only a moderate increase in costs, which helped amplify the impact of sales growth on the bottom line. The third quarter EBIT was also supported by a €10 million gain from a divestment.
On a nine-month basis, orders increased by 9.0% at constant currencies, with the Medical division up 11.6% and Safety up 5.7%. Despite the strong third quarter, the company’s nine-month EBIT remains slightly below the prior year’s level, which had benefited from €30 million in divestment gains.
The company faces potential headwinds in 2025 from tariffs and adverse currency movements, according to the preliminary report.
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