Dutch health technology company Philips said on Monday it expected to return to growth in the second half of the year, if hospitals and consumers were able to gradually overcome the first shock of the coronavirus pandemic.
The firm, which makes products ranging from electric toothbrushes to medical imaging systems, said comparable sales dropped 6% in the second quarter, to 4.4 billion euros ($5 billion), as the global spread of Covid-19 hit demand for its consumer products and caused hospitals to delay the installation of new equipment.
But the pandemic also spurred a 27% increase in new orders, as hospitals rushed to buy CT scanners, ventilators and monitoring equipment needed to help patients battling the respiratory disease.
These orders and a slowdown in the global spread of the pandemic should enable Philips to modestly improve its sales and profit margins for the full year, Chief Executive Frans van Houten said.
"We expect to return to growth and improved profitability in the second half of the year, assuming we can convert our existing order book, elective procedures normalize and consumer demand gradually improves", the CEO said.
Philips said its adjusted earnings before interest, taxes and amortization (EBITA) fell 24% to 418 million euros in the April-June period, beating analysts' expectations for a drop to 344 million euros.