January 29, 2019 / 6:38 AM / 6 months ago

UPDATE 2-Atellica roll-out drags on diagnostics profit at Siemens Healthineers

* Q1 sales rise 3 pct to 3.3 bln EUR, in line with poll

* Adj profit flat at 545 mln EUR, shy of 555 mln forecast

* Atellica's lengthy installation hits diagnostics profit

* Confirms outlook for fiscal year 2019 (Adds details from call, CEO quotes, shares)

By Caroline Copley

BERLIN, Jan 29 (Reuters) - Siemens Healthineers said on Tuesday it would take steps to raise profitability at its diagnostics unit after lengthy installation times for its new Atellica blood and urine testing machines pushed down profit at the division.

The German firm is pinning its hopes on Atellica to turn around its In-Vitro diagnostics business. where it lags market leader Roche. It said strong customer demand, especially in large and complex laboratories, was proving both a boon and a burden.

Healthineers said it had delivered more than 1,370 Atellica units by the end of last year but that lengthy installation times were leading to delays in booking revenues from the highly-profitable tests used in the machines.

Chief Executive Bernd Montag told reporters that Healthineers had boosted its installation teams, added experienced staff, and said the project would now report directly to him to make decision-making faster.

"We have all hands on deck because this must be the priority for the organisation ... until the end of the fiscal year," he said.

More than 35 percent of orders had come from new customers, Healthineers said. It hopes to deliver up to 2,500 machines this year, with shipments expected to increase in coming quarters as approval in China is expected in the second half. It goal had become more ambitious, it said.

Shares in Healthineers were down 3.7 percent at 33.99 euros by 0815 GMT.

Reported profit at the diagnostics business fell by 24 percent to 76 million euros ($87 million) in its fiscal first quarter, compared to 99 million euros a year earlier.

Sales at it core imaging business, which makes X-ray, computed tomography and MRI machines, rose 4 percent, helping group sales increase by 3 percent to 3.3 billion euros, in line with analyst expectations.

Adjusted profit was flat, at 545 million euros, slightly below the consensus forecast for 555 million.

The company confirmed its forecast for a profit margin of 17.5 to 18.5 percent for its 2019 fiscal year, compared with 17.2 percent in 2018, and of comparable sales growth of 4 to 5 percent. ($1 = 0.8750 euros) (Reporting by Caroline Copley Editing by Riham Alkousaa and Subhranshu Sahu; editing by John Stonestreet)

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