Philips posts 9% rise in third-quarter sales, as profit falls on impairment charge

Headline results for the third quarter:

Revenue

€4.7 billion ($5.2 billion)

+9%

Profit

€208 million ($231 million)

Versus €292 million ($324 million)

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

CEO Frans van Houten stated that the company delivered "mixed results" in the third quarter. He said "we recorded strong 6% comparable sales growth," reflected by gains in the mid-single digits for mature geographies and in the high-single digits for growth geographies, including double-digit growth in China.

Van Houten also noted that the adjusted earnings margin in its diagnosis and treatment, as well as its personal health businesses showed "continued improvement," but as previously announced, the adjusted earnings margin for connected care declined to 11.3%, due to "increasing headwinds from tariffs and a delay in the impact of mitigating actions, factory under-coverage and an adverse product mix impact."

Meanwhile, the company said its net income decrease for the quarter stems from a charge of €78 million ($86 million) related to a goodwill impairment in the connected care segment.

Other results:

  • Diagnosis & Treatment: €2.1 billion ($2.3 billion), up 13%, as ultrasound sales posted double-digit growth, while diagnostic imaging and image-guided therapy saw increases in the high-single digits
  • Personal Health: €1.4 billion ($1.6 billion), up 7%, with double-digit growth in oral healthcare and low-single-digit gains in personal care
  • Connected Care: €1.1 billion ($1.2 billion), up 9%, with mid-single-digit growth in monitoring and analytics, as well as sleep and respiratory care
  • Sales in mature markets: €3.1 billion ($3.4 billion), up 9%, with mid-single-digit growth in Western Europe and North America
  • Sales in growth markets: €1.6 billion ($1.8 billion), up 10%, driven by double-digit gains in China and India

Looking ahead:

For the full-year, van Houten said Philips continues "to expect growth to be within the 4% to 6% range."

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