Philips Q3 core profit rises 12%

Key Points
  • Dutch health technology company Philips said Monday that strong growth in China pushed sales up 4 percent in the third quarter.
  • Core profits rose 12 percent to 532 million euros ($626.11 million).
Solidly on course to meet full-year targets: Philips CEO
Solidly on course to meet full-year targets: Philips CEO

Dutch health care technology company Philips said on Monday its core profits in the third quarter rose 12 percent to 532 million euros ($626.1 million), as strong growth in China pushed comparable sales up 4 percent.

The profit increase was the result of savings and strong sales growth in China and other emerging markets. Sales in North America were flat at current exchange rates, while they decreased 6 percent in Western Europe.

Philips, which spun off its lighting division last year to focus on medical devices and healthcare products, recorded total sales of 4.1 billion euros, while net income from continued operations rose 23 percent to 263 million euros.

Adjusted earnings before interest, taxes and amortization (EBITA) were in line with analyst expectations, but sales growth fell short of the 4.5 percent forecast in a Reuters poll.

Frans van Houten, chief executive officer of Royal Philips NV
Jasper Juinen | Bloomberg | Getty Images

Sales growth slowed at the company's main divisions, which sell consumer products and high-end medical equipment such as scanners and imaging tools used during surgery.

The connected care and informatics business, which includes patient monitoring systems and software used by hospitals to gather and analyse data, was a notable exception, with sales growth picking up to 8 percent after stagnating in the second quarter.

"Philips' performance in the third quarter demonstrates that we continue to deliver on our plan," Chief Executive Frans van Houten said in a statement. "Despite ongoing global uncertainties, our outlook for 2017 remains unchanged."

The company expects sales growth of 4-6 percent in 2017 at constant exchange rates, and an adjusted EBITA margin improvement of around 100 basis points.