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UPDATE 1-Philips core earnings up 18 pct despite soft sales growth
April 24, 2017 / 6:19 AM / 7 months ago

UPDATE 1-Philips core earnings up 18 pct despite soft sales growth

(Adds details; forecast for stronger sales in second half)

AMSTERDAM, April 24 (Reuters) - Philips, the maker of medical devices and healthcare products, beat expectations on Monday with an 18 percent rise in first-quarter core earnings to 442 million euros ($480 million) despite weak sales growth.

That topped the 427 million euros in adjusted earnings before interest, taxes, and amortisation (EBITA) expected by analysts polled for Reuters and the 374 million euros it earned a year earlier.

Sales on a like-for-like basis rose 2 percent to 5.7 billion euros. Sale rose by three percent at Philips’ healthcare-linked businesses, below Philips’ medium-term guidance for 4-6 percent sales growth annually.

Philips expects to gradually sell down its 54 percent stake in Philips Lighting , which on Friday reported falling sales and rising profits.

”Our outlook for 2017 remains unchanged as we expect further operational improvements and comparable sales growth in the year to be back-end loaded,” said CEO Fran van Houten.

Philips attributed the improvement in margins to cost savings on overhead and procurement.

Sales growth came mostly from emerging markets, but the company said order intake was strongest in Western Europe.

Among its three divisions, the company reported 5 percent growth at its personal health arm, which sells consumer products including toothbrushes as well as machines to relieve sleep apnea.

Its diagnosis & treatment division, which sells high-end medical scanners and imaging tools used during surgery, saw sales rise by 2 percent.

Its connected care and informatics business, which includes patient monitoring systems and software used by hospitals to gather and analyse data, reported a 1 percent rise in sales.

$1 = 0.9210 euros Reporting by Toby Sterling; editing by Muralikumar Anantharaman and Jason Neely

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