October 28, 2019 / 6:29 AM / 24 days ago

Philips third-quarter core profit rises 3% on strong demand

FILE PHOTO: Dutch technology company Philips. logo is seen at company headquarters in Amsterdam, Netherlands, January 29, 2019. REUTERS/Eva Plevier/File Photo

AMSTERDAM (Reuters) - Dutch health technology company Philips (PHG.AS) said on Monday its core earnings rose 2.6% in the third quarter to 583 million euros ($646.3 million) on strong global sales of its medical machines.

Comparable revenue increased 6% to 4.7 billion euros, led by double-digit growth of hospital equipment sales in China, India and Latin America.

Philips’ numbers were in line with preliminary results released earlier this month, when the company warned it would miss its 2019 profit margin target due to trade tariffs and poor results at its Connected Care arm.

The company’s warning wiped off around 3 billion euros of market value of the once-sprawling conglomerate, which in recent years has focused on healthcare technology.

“In the third quarter, we delivered mixed results,” Chief Executive Frans van Houten said. “We recorded strong sales growth [but] comparable order intake was flat.”

Philips stuck to its target of improving comparable sales by 4% to 6% this year. The adjusted EBITA margin is expected to only improve by 10 basis points to 20 basis points this year, and to reach its original 100 basis point goal in 2020.

($1 = 0.9021 euros)

Reporting by Bart Meijer; Editing by Himani Sarkar and Sherry Jacob-Phillips

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