Shares in Elekta plunged as much as 27% after it said today that earnings before interest, tax, amortisation and non-recurring items for the fiscal year ended in April would be about 1.4 billion crowns ($168.6 million).
In March, the maker of equipment used in cancer treatments forecast that EBITA before non-recurring items and at constant exchange rates would rise about 6% from 2.2 billion crowns ($265 million) last year. The consensus forecast for earnings was 2.3 billion ($277 million).
"Basically, management lost track of the ball," chairman Laurent Leksell said during a conference call with analysts today.
Leksell said the board decided to change the CEO as soon as it saw the preliminary figures yesterday. Savander, a former Nokia executive, succeeded Tomas Puusepp in October 2013.
The company said earnings would fall short mainly because large expected U.S. orders did not close and also because deliveries, especially in emerging markets, had been hit by war, civil unrest, market conditions and political developments.
"There are several failures here," said Swedbank analyst Johan Unnerus. "It is of course not good that they recruit a CEO that resigns this quick. This also signals that they haven’t been able to read their own market and customers."
Elekta, which has posted profit below expectations throughout the year and has already cut its forecasts several times, said it had cancelled about 700 million crowns ($84 million) of orders.
"This is related to projects in North America where hospital consolidation has led to order cancellations, as well as projects in Latin America and India … primarily due to customers’ financing difficulties," Elekta said in a statement.
The Swedish company, which competes with Varian Medical (NYSE:VAR), said on its website that analysts polled by SME Direkt had on average forecast an EBITA before non-recurring items of 2.3 billion crowns.
Elekta, which is due to publish its full earnings report June 2, said Puusepp would take on the CEO role.
Full-year preliminary sales fell 8% at constant exchange rates. As late as March it had predicted a 4% sales rise on expectations of a strong 4th quarter.
The company also said preliminary full-year order bookings fell 13% at constant exchange rates.
($1 = 8.3020 Swedish crowns)