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Investing.com -- Elekta (ST:EKTAb) shares rose more than 4% on Wednesday after the company reported fourth-quarter results that exceeded expectations on sales and margins, despite weaker order intake and a one-time R&D impairment charge.
The order book declined 7% in constant currency, missing the consensus estimate of a 4% increase.
This followed a 21% rise in the third quarter and came despite recent product launches, including the linac Evo and updates to the Eleta ONE software suite.
The company gave no update on China. The book-to-bill ratio was 1.12x for the quarter and 1.09x for the full year.
“We still question EKTAB’s ability to restore top-line momentum in light of lacklustre order intake (avg -1.5% over past 2-yr),” said analysts at Jefferies in a note.
Quarterly sales reached SEK 5.16 billion, slightly ahead of consensus at SEK 5.11 billion.
Organic sales growth came in at 5.5%, driven by EMEA and APAC, offset by a 6% decline in the Americas. Sales were skewed toward Solutions over Services.
Adjusted EBIT was SEK 843 million, 12% above the SEK 753 million consensus. The adjusted EBIT margin rose to 16.3%, from 14.7% a year earlier, supported by price increases and cost savings. Gross margin expanded 370 basis points to 40.3%.
The quarter included a non-cash impairment charge of under SEK 1.1 billion, tied to discontinued R&D projects following a shift in development strategy, including a move to an external cloud platform.
The charge impacted about 8% of the company’s tangible and intangible assets. Adjusted EPS was SEK 1.11, 19% below consensus at SEK 1.38.
For fiscal 2025-26, Elekta (BS:EKTABs) expects sales growth of 5.5% and a 40 basis point margin improvement, both in line with estimates.
The company cited normal seasonality and currency headwinds for the first quarter. It maintained a medium-term margin target of 14% or more but is not expected to provide further financial detail at its June 10 event due to the absence of a permanent CEO.
Elekta manufacturers in China and the U.K. for the U.S. market, with other production in the Netherlands and Sweden.
The stock, down more than 40% over the past year, trades at under 15x estimated 2025 earnings, said analysts at Jefferies.