May 2, 2018 / 8:51 AM / a year ago

GN Store Nord hits 18-year high after upbeat first quarter, share buyback

FILE PHOTO: An employee of GN Store Nord demonstrates the use of ReSound LiNX in Vienna November 22, 2013. REUTERS/Heinz-Peter Bader/File Photo

(Reuters) - Shares in GN Store Nord (GN.CO) rose five percent on Wednesday to their highest in 18 years after the Danish hearing aid and headset maker beat first-quarter earnings forecasts and announced a plan to buy back shares.

The company made a core profit (EBITA) of 354 million Danish crowns ($57 million), above the 338 million crowns expected by analysts, driven by its headset unit.

It also announced plans to buy back 1 billion crowns ($161 million) of shares. At 0835 GMT, GN Store Nord’s stock was up 5.3 percent at 232.90 crowns, after touching 234.2 crowns, their highest since 2000.

GN Audio, the company’s headset division, saw underlying revenue growth of 17 percent in the quarter, well above expectations, and the division’s full-year guidance was lifted to “around 9 percent from more than 7 percent”.

“We see these results as positive for GN”, analysts at Bernstein said in a note, adding strong profitability and improved guidance in the headset unit were welcome surprises.

Performance in the hearing aid division disappointed some analysts, with underlying revenue growing 5 percent in the quarter, although GN left guidance for that unit unchanged.

“We are somewhat concerned about the sharp slowdown in organic growth in GN Hearing,” Jyske Bank said in a note. Underlying revenues in the unit had grown 11 percent in the final quarter of last year

“We fear that organic (underlying) growth will slow down even further over the year as comparisons get tougher, especially going into the second half of the year,” it said.

Reporting by Emil Gjerding Nielson; Editing by Jacob Gronholt-Pedersen and Mark Potter

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