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Philips Posts Strong Q2 Results, Backs Positive FY Outlook; Stock Up

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Shares of Philips Electronics NV (PHGFF.PK,PHG) were gaining around 4 percent in the early morning trading in Amsterdam after the Dutch consumer electronics giant reported Monday significantly higher profit in its second quarter, reflecting narrower loss from discontinued operations and higher sales.

Looking ahead, Frans van Houten, Chief Executive Officer, said, "We continue to expect our performance momentum to further improve in the second half of the year, supported by sales growth and our productivity programs. We maintain our overall targets of 4-6 percent comparable sales growth and an Adjusted EBITA margin improvement of 100 basis points on average per year for the 2017-2020 period."

For the second quarter, net income was 246 million euros, significantly higher than prior year's 2 million euros. Earnings per share were 0.27 euro, compared to break-even last year.

The results reflected loss from discontinued operations of 13 million euros, compared to last year's loss of 184 million euros.

On a continuing operations basis, income increased to 260 million euros from prior year's 186 million euros. Earnings per share from continuing operations grew to 0.28 euro from 0.20 euro last year.

Adjusted income from continuing operations per share amounted to 0.43 euro. Adjusted EBITA margin was 11.8 percent of sales, compared to 11.2 percent a year ago. The margin growth was driven by the performance improvement of the Diagnosis & Treatment businesses, despite adverse currency and tariff impacts.

Sales in the quarter amounted to 4.67 billion euros, up 9 percent from last year's 4.29 billion euros. Sales increased 6 percent on a comparable basis with mid-single-digit growth in all businesses.

In the quarter, sales in growth geographies increased 9 percent on a comparable basis, mainly driven by double-digit growth in China. In mature geographies, sales increased 5 percent.

Comparable order intake increased 8 percent, benefited by continued demand for innovative product portfolio across the Diagnosis & Treatment businesses, despite weakness in the Connected Care businesses.

In Amsterdam, Philips shares were trading at 40.50 euros, up 4.02 percent.

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