Philips core profit rises 12% in Q3

Dutch health care technology company Philips said Monday its core profits in the third quarter surged 12 percent to €532 million ($626.1 million), as strong growth in China pushed comparable sales up 4 percent.

The profit increase was the result of savings and strong sales growth in China and other emerging markets. Sales in North America were flat at current exchange rates, while they decreased 6 percent in Western Europe.

Philips, which spun off its lighting division last year to focus on medical devices and healthcare products, recorded total sales of €4.1 billion, while net income from continued operations rose 23 percent to €263 million.

Adjusted earnings before interest, taxes and amortization (EBITA) were in line with analyst expectations, but sales growth fell short of the 4.5 percent forecast in a Reuters poll.

Sales growth slowed at the company’s main divisions, which sell consumer products and high-end medical equipment such as scanners and imaging tools used during surgery.

The connected care and informatics business, which includes patient monitoring systems and software used by hospitals to gather and analyse data, was a notable exception, with sales growth picking up to 8 percent after stagnating in the second quarter.

“Philips’ performance in the third quarter demonstrates that we continue to deliver on our plan,” Chief Executive Frans van Houten said in a statement. “Despite ongoing global uncertainties, our outlook for 2017 remains unchanged.”

The company expects sales growth of 4-6 percent in 2017 at constant exchange rates, and an adjusted EBITA margin improvement of around 100 basis points.

Source: Reuters