August 30, 2018 / 6:59 AM / 8 months ago

UPDATE 1-Elekta stands by outlook despite Q1 profit miss

* Fiscal Q1 EBIT 238 mln SEK vs consensus 282 mln

* Booked 4 orders in Q1 for new radiotherapy gear Unity

* Targets U.S. approval in 2018 for expected growth driver Unity (Adds detail, background)

STOCKHOLM, Aug 30 (Reuters) - Swedish radiation therapy gear maker Elekta posted on Thursday an unexpected drop in first-quarter operating profit but stood by its full-year outlook as sales and order intake grew more than expected.

Elekta’s May-July profit fell to 238 million crowns ($26.0 million) from a year-ago 281 million, while analysts polled by Reuters had seen a roughly unchanged profit.

Elekta, whose main rival is U.S. firm Varian Medical Systems , said its gross margin fell to 39.1 percent from 46.4 percent mainly due to higher volumes in lower-margin emerging markets and an unfavourable project mix.

“We are confident that the gross margin will increase during the remainder of the year, primarily related to improved geographic and project mix and Elekta Unity revenues,” CEO Richard Hausmann said in the report.

Higher costs, such as for the commercialization of its new radiation therapy system Unity, also weighed on results, Elekta said.

Elekta booked four orders for Unity in the quarter, bringing the total sold to 32. The machine, seen as an important future growth driver, won approval in Europe in June and the company has earlier said it expects U.S. approval by year-end.

Elekta’s shares have spiked more than 70 percent in the past six months after restructuring last year following three straight years of falling profits.

Sales grew 10 percent based on constant exchange rates to 2.8 billion crowns, against a mean forecast 2.7 billion.

Gross order intake grew 12 percent based on constant exchange rates to 3.2 billion, against a 3.0 billion forecast. In North and South America, Elekta’s biggest region by sales, the increase was 23 percent.

Elekta expects sales growth of around 7 percent based on constant exchange rates and an EBITA margin of around 20 percent in its 2018/19 fiscal year . ($1 = 9.1492 Swedish crowns) (Reporting by Anna Ringstrom; editing by Niklas Pollard)

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