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Investing.com -- Shares of Getinge AB (ST:GETIb) jumped more than 10% on Tuesday following a strong earnings performance that surpassed analyst expectations.
The Swedish-based company’s fourth-quarter results were a broad-based beat, driven by a 10% sales outperformance in its Acute Care Therapies segment.
Getinge attributed this growth to strong ventilator sales in Critical Care, along with strong demand for ECLS consumables, EVH, and Cardiac Assist devices.
The company also provided guidance for 2025, projecting organic sales growth between 2-5%.
Analysts at Morgan Stanley (NYSE:MS) noted that this outlook aligns with consensus expectations of 3.8% organic growth.
However, much of the market’s focus is expected to be on Getinge's margin performance, as no specific margin guidance was provided.
With a substantial 34% earnings before interest, taxes, and amortization beat in the fourth quarter, Getinge reported a margin exit rate of 19%, ahead of the 15% consensus forecast.
Analysts believe that this, combined with the phase-out of a lower-margin business, positions the company for margin expansion in 2025, which could lead to significant upgrades to 2025 EBITA estimates.
Getinge reported fourth-quarter orders of SEK 9.27 billion, exceeding analyst expectations by 2%.
Sales reached SEK 11.07 billion, surpassing consensus by 6%. Organic sales growth was 9%, higher than the anticipated 3%.
Adjusted EBITA totaled SEK 2.14 billion, 34% above expectations, resulting in a 19.4% margin, a 410 basis point improvement over the consensus estimate.
The company incurred one-off costs of SEK 522 million for the Surgical Perfusion phase-out and SEK 297 million related to a Cardiosave field action.
The Acute Care Therapies division experienced strong growth. Orders increased by 6% to SEK 4.92 billion, and sales rose by 10% to SEK 5.53 billion.
This growth was driven by increased demand for ventilators in Critical Care, as well as ECLS and Cardiac Assist products. Life Sciences posted mixed results.
Orders declined by 5% to SEK 1.21 billion, while sales grew by 5% to SEK 1.49 billion, supported by recovery in Sterile Transfer and growth in sterilizer consumables.
Surgical Workflow also delivered solid growth, with sales increasing by 2%, although order intake was slightly below expectations.
Getinge's decision to exit the Surgical Perfusion business impacted the quarterly results. The company cited unsatisfactory market share and limited growth potential in this segment.
The exit will incur restructuring costs of SEK 800 million, with SEK 522 million recognized in the fourth quarter.
These costs primarily relate to write-downs of R&D and inventory. The company expects this exit to slightly improve adjusted EBITA starting in 2025, with further improvements expected as resources are reallocated to other areas like ECLS and Transplant Care.