Investing.com - Elekta (BS:EKTABs) AB shares plunged 10.25% after the Swedish medical equipment maker lowered its full-year guidance, citing weaker sales expectations in China and the United States.

The company reported third-quarter adjusted earnings per share of SEK 0.94, up from SEK 0.88 in the same period last year. Revenue rose 3% to SEK 4.70 billion, representing a 2% increase in constant currency terms.

Elekta's book-to-bill ratio improved to 1.15, driven by 21% order growth in constant exchange rates across all regions and business lines.

Despite the revenue growth, Elekta adjusted its outlook for fiscal year 2024/25, now expecting net sales to be "broadly stable" and EBIT margin to be lower compared to the previous year.

The company cited increased global uncertainty and anticipates weaker near-term sales in China and the U.S. as key factors behind the revised guidance.

"As uncertainty in the world increases, and near-term we expect lower sales in China and the U.S., we are adjusting our full year guidance," said Gustaf Salford, President and CEO of Elekta.

The company's third-quarter performance was negatively impacted by lower volumes in China due to continued weak market conditions, and in the U.S. where installations slowed as customers await regulatory clearance for the new Elekta Evo system.

Elekta reported strong cash flow after continuous investments of SEK 730 million, up from SEK 631 million in the prior-year quarter, driven by improved EBITDA and working capital reduction.

With shares up year-to-date and valuation far from all-time lows (approximately 17 times price-to-earnings for calendar year 2025 estimates), we see scope for a meaningful pullback today (high single digits), Jefferies said in a note after Elekta reported results, adding that it still questions company’s ability to restore top-line momentum in light of lackluster order intake (average 0% over the past 2 years).

Looking beyond the current fiscal year, Elekta is targeting an EBIT margin of 14% or higher, supported by customer interest in its product portfolio and growing demand for cancer care solutions.

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