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Philips Q3 profit rises less than expected, cites currency headwinds
[AMSTERDAM] Dutch healthcare technology company Philips on Monday said its core profit in the third quarter rose 6.8 per cent to 568 million euros (S$1.18 billion), missing analyst estimates despite rising sales and improving margins.
Analysts polled for Reuters had seen adjusted earnings before interest, taxes and amortisation (EBITA) of 590 million euros, compared with 532 million in the same period last year.
Philips blamed currency headwinds, saying comparable sales grew by 4 per cent and margins improved, while order intake was up 11 per cent from a year ago. Notably, it said sales were up 9 per cent in China while orders were up by "double digits", while fears of lagging Chinese growth had been a point of concern for many investors.
"While I am pleased with the continued strong 11 per cent order intake growth in the quarter, operational improvements were partially offset by increased foreign exchange headwinds," CEO Frans van Houten said in a statement.
The company's EBITA margin improved by 0.4 pct to 13.2 per cent of sales, and Van Houten repeated the company's target of 4 to 6 per cent average comparable sales growth over the 2017-2020 period.
Philips' largest division, which makes medical imaging equipment such as ultrasound machines, saw comparable sales rise 6 per cent to 1.75 billion euros, with growth skewed toward emerging markets and North America.
Comparable sales fell 2 per cent to 741 million euros at its Connected Care or patient monitoring business, and rose 4 per cent to 1.68 billion euros at its Personal Care business, which includes sleep and breathing aid devices.