(Reuters) – Shares in Denmark’s GN Store Nord jumped as much as 15% on Friday after its financial results met forecasts following previous misses, legal problems and fears over the performance of one of its units.
The company is one of the world’s biggest hearing aid makers through its GN ReSound division, but its GN Netcom unit making Jabra headsets also generates about a third of profits.
GN’s shares were up 11.5% at 124.40 Danish crowns at 1211 GMT. Its stock fell this month after a competitor in the headset market, Plantronics, reported poor results, stoking fears of a slowdown in that market.
The shares had been tumbling since August, when GN reported second-quarter results that fell short of market expectations and said it would take a one-off charge of 150 million crowns,($23 million) citing a fraud case, later resolved.
On Thursday, GN reported quarterly earnings before interest, tax and amortisation (EBITA) of 522 million Danish crowns ($79 million), up from 477 crowns a year before. Analysts had expected 519 million crowns.
For the full year, revenue grew 14% to 8.4 billion crowns while EBITA rose 16% to 1.46 billion crowns, both also in line with forecasts.
“When you finally deliver on strong expected growth, when the market hasn’t priced that in, the share goes up much more,” Alm. Brand analyst Michael Friis Jorgensen said.
“The results were in line with analysts’ forecasts but not with investors’ expectations,” he said. “It is more of a relief. GN is really a cheap share and today will be only the first leg of people buying into the share.”
GN Netcom’s results for both the quarter and full year also met expectations.
“The Netcom division especially is a positive surprise – it delivered strong earnings, driven by the sale of headsets, which surged in the fourth quarter,” Sydbank analyst Morten Imsgard said.
“The challenge lies in the mobile headset devices, where sales are a bit lower,” he said, though he added mobile headset devices were not “critical” for earnings.
Denmark’s GN ReSound, William Demant and smaller rival Widex sell half of the world’s hearings aids. The other major competitor is Sonova, after Siemens sold of its hearing aid business to Swedish private equity fund
EQT. ($1 = 6.6158 Danish crowns)