Dutch health technology company Philips reported on Monday a much better-than-expected 32% jump in third-quarter core earnings, as the coronavirus pandemic spurred demand for hospital equipment needed to help patients battling the disease.
Philips said adjusted earnings before interest, taxes and amortization (EBITA) increased to 769 million euros ($900.1million) in the July-September period, while comparable sales rose 10% to 4.98 billion euros.
Analysts polled by the company on average had expected core earnings of 630 million euros, on 4.82 billion euros of sales.
Growth was mainly driven by a 42% increase in sales of the connected care division, which makes monitoring and respiratory care devices needed for COVID-19 patients.
In an update of its targets, Philips said it expected average sales growth of 5% to 6% per year between 2021 and 2025, with the adjusted EBITA margin improving by 60 to 80 basis points each year.
For 2021, however, the company predicted "low-single-digit growth", as demand for COVID-19 equipment is expected to cool down.
Philips maintained its outlook for moderate sales growth and a stable EBITA margin for the whole of 2020.