Philips CEO: 'Obamacare' is a temporary distraction
Dutch electronics and health-care firm Philips reported higher-than-expected third-quarter earnings on Monday as Frans van Houten, CEO of the company told CNBC that the new Affordable Care Act in the United States is proving beneficial to the company.
"I see the healthcare reform as a temporary detraction, but pretty soon when that will stabilize people will realize that innovation is the way to go to cater for more patients with chronic disease that live longer at lower cost," he said.
(Read More: Philips CEO: US Health-Care Reforms Hurting Sales)
Van Houten told CNBC in April that health-care reforms in the U.S. - also known as Obamacare - had made hospital CEOs cautious about spending money, hurting U.S. sales. The new laws have also caused political wrangling in Washington with the recent government shutdown in the U.S. coming after Republicans sought amendments to the act.
But Philips now appears more upbeat on the new reforms, with Van Houten explaining that overall it will cause consolidation of the healthcare system.
The company - which now sees nearly half of its revenue come from its healthcare division - signed a deal in June with the state of Georgia's public academic health center, with the Dutch firm offering consulting services and advanced medical technologies.
"I am very excited to become technology partner of hospitals and help them drive efficiency in the delivery of care to patents," he said.
(Read More: Philips raises earnings targets, buys back shares)
"(It) underlines that Philips is well on the way to be nimble and agile and to drive a better result also when there's less growth to be head."
Philips reported net profit that nearly tripled from the year earlier, at 281 million euros ($384 million) from 105 million euros in the third quarter of 2012. This beat analysts' expectation for a rise to 209 million euros. Shares in the company surged 6.3 percent in morning trade on Monday.
Van Houten said that the company would wait until 2016 and then look to expand further into the healthcare sector and drive up production and innovation. He added that currently Philips is not seeing any softness in demand in emerging markets. The underlying demand was holding steady, with the firm growing 10 percent in last quarter in these regions, he said.
"Many of the emerging markets have strong desire to upgrade their healthcare system, to improve their lighting system. And then of course there is the growing middle class that would like to have a good life," he said.
— CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81