By Marie Mannes
STOCKHOLM (Reuters) - Medical equipment maker Getinge on Tuesday reported a sharp drop in second-quarter core profit, hit by quality and supply chain problems in its Cardiac Assist and Cardiopulmonary product categories.
The Swedish group had warned in June that the problems would have a negative impact of around 400 million Swedish crowns ($39.19 million) on quarterly profit.
Chief Executive Mattias Perjos in June said the majority of the profit hit would be due to scrapped inventory related to product and packaging issues.
Order intake for the April-June period came to 7.36 billion crowns, a miss in all of its segments according to JPMorgan (NYSE:JPM).
Shares in the company were up over 3.5% at 190 Swedish crowns at 0852 GMT.
"Positive share price reaction can be explained by a relief the quarter was not even worse, together with some positive news about the quality issues," Carnegie analyst Kristofer Liljeberg told Reuters.
Operating profit before amortisation, restructuring costs and write-downs (adjusted EBITA) came in at 495 million crowns, compared to 956 million crowns in the same period a year ago.
The company said in a call to analysts that it would not be able to update its midterm guidance until its quality and supply challenges had been solved, stating late this year or beginning of next as the earliest time this would be possible.
The company has struggled, especially in China, which was particularly weak in several areas.
However, Perjos said onn a call to analysts that it still believed in China in the longer term.
Perjos added that he did not see a strong recovery in the market as of yet for the company, but saw a small normalisation.
($1 = 10.2445 Swedish crowns)
($1 = 10.2058 Swedish crowns)