Philips quarterly profit rises amid strong orders in China

[PARIS] Royal Philips NV reported a 9 per cent increase in fourth-quarter adjusted profit and said orders were strong in China and North America at its diagnosis-equipment business.

Adjusted earnings before interest, taxes and amortization rose to 884 million euros (S$1.44 billion), the maker of medical scanners said in a statement on Tuesday. That missed the average estimate of analysts surveyed by Bloomberg of 898.2 million euros.

"We're very happy" with the growth in orders, chief executive officer Frans van Houten said in an interview with Bloomberg TV, adding that the company "will continue to look" at possible acquisitions.

Philips has pledged to improve profit margins after refocusing its business on health-care equipment and services while exiting from the manufacture of products like light bulbs, TVs and CDs.

To boost revenue, the Amsterdam-based company is aiming for more partnerships with hospitals, where it competes with General Electric Co and Siemens AG to sell devices like X-ray and diagnostic machines.

Comparable sales in the latest quarter rose 5 per cent, bringing the increase for the year to 4 per cent and allowing the company to meet its outlook of 4 per cent to 6 per cent growth. It kept this target for the mid-term along. Orders over the quarter rose 7 per cent.

The company has also been cutting its holding in spinoff Philips Lighting NV, selling a 12 per cent stake in November to raise 547 million euros.

Philips last year suspended production of some heart defibrillators in the US for about a year after reaching an agreement with the Department of Justice over quality inspections. Operations at sites in Andover, Massachusetts and Bothell, Washington will be subject to increased scrutiny by regulators, it said.

BLOOMBERG