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By Anna Ringstrom
STOCKHOLM (Reuters) - Swedish medical equipment maker Getinge reported on Tuesday a larger than expected drop in quarterly profit due to shortages of materials and higher component costs, sending its shares down 14% in early trade.
But the maker of products used in surgery, intensive care and sterilisation predicted a strong margin recovery with volumes expected to rise in rest of 2022. It stood by a forecast for full-year organic sales growth at the higher end of the 4%-6% range.
"We have well-functioning methods for ensuring access to components and transportation, and I am confident ahead of the second half of the year in which we expect to make major deliveries," Chief Executive Mattias Perjos said in a statement.
First-quarter operating earnings fell to 780 million crowns ($80.5 million) from 960 million crowns a year ago on an organic sales drop of 6%.
Five analysts polled by Refinitiv had on average forecast an 876 million crown profit in the quarter.
Getinge said profit margins were squeezed by lower sales volumes and an unfavourable product mix. Order intake slowed 4%.
The company said it had partly compensated for cost increases for components by raising prices.
The group raised its financial targets late last year, citing hospitals taking on surgeries postponed in the pandemic, infection control becoming more important, the COVID-19 vaccination rollout and demand growth seen before the pandemic.
Commenting on Russia's invasion of Ukraine, the company said on Tuesday it was still operating in Russia by fulfilling existing customer commitments and bidding for new orders, although it said it was monitoring developments.
"It has successively become more difficult to conduct operations in Russia despite the fact that the health sectors are not subject to current trade sanctions," it said.
Russia last year accounted for 1% of Getinge's sales. The group has suppliers but no own production in the country.
($1 = 9.6887 Swedish crowns)
(Reporting by Anna Ringstrom; Editing by Niklas Pollard and Edmund Blair)