Investing.com -- Shares of Elekta (ST:EKTAb) jumped on Wednesday, following its first quarter results.

At 5:30 am (0930 GMT), Elekta was trading 5.7% higher at SEK 72.95.

The company's quarterly results exceeded expectations in terms of both sales and profitability, providing a much-needed boost to its stock, which had experienced significant declines in recent months.

Elekta's First quarter results were marked by a 10% increase in order intake at constant currency (CER), well above the consensus expectation of no growth. This order growth was largely driven by a significant $38 million contract in Mexico.

The company’s sales for the quarter totaled SEK 3,825 million, surpassing the consensus estimate of SEK 3,689 million by 4%. Organic sales growth (OSG) reached 0.8%, exceeding the anticipated decline of 2.9%.

The company's adjusted gross margin (GM) was recorded at 37.8%, ahead of the consensus estimate of 36.8%.

Adjusted EBIT amounted to SEK 283 million, representing a 23% beat over the consensus estimate of SEK 230 million, resulting in an adjusted EBIT margin of 7.4%, compared to the expected 6.2%. Adjusted diluted earnings per share (EPS) came in at SEK 0.41, beating the consensus of SEK 0.32 by 27%.

The Americas saw a 16% increase in orders, while EMEA faced a 12% decline, driven by tough comparisons from large installations in Spain and Italy.

The APAC region posted a 3% growth, bolstered by strong performance in India and Korea, although China continued to face challenges due to the ongoing anti-corruption campaign.

Elekta's sales mix shifted towards Services, which grew by 5%, while Solutions saw a 3% decline. The company faced margin pressure, with the gross margin declining 380 basis points year-over-year due to inflationary pressures and reduced inventory revaluation impacts.

However, the company has implemented measures to improve profitability, including price hikes and cost-saving initiatives, which led to a sequential improvement in gross margin.

Elekta reaffirmed its FY24/25 guidance, expecting mid-single-digit (MSD) revenue growth, compared to the consensus forecast of 3.5%, and EBIT margin expansion.

The company anticipates a weaker H1, with a rebound in sales and profitability expected in H2, driven by new product launches and productivity improvements. For the longer term, Elekta aims to achieve an EBIT margin of 14% or higher by FY27/28, supported by strong customer interest and growing demand for its cancer care solutions.

“Capturing the beat to adj EBIT implies c. 2% upgrades to consensus adj EBIT for the full-year,” said analysts at J.P. Morgan.