Philips Q2 Net Income Down, Sales Rise; Backs FY17 Outlook

Paterniano Del Favero
Luglio 25, 2017

Dutch health technology company Philips (PHG.AS) said it expects sales growth to accelerate over the remainder of the year after USA orders jumped 9 percent in the second quarter.

US sales grew 4 percent in the first quarter from a year earlier, the fastest growth in more than a year and rebounding from a 2 percent slip in the first quarter. "We achieved a 90-basis-point increase in the Adjusted EBITA margin, driven by higher volumes, operational improvements and cost productivity", CEO Frans van Houten said in prepared remarks.

"Despite continued volatility in the markets in which we operate, our outlook for 2017 remains unchanged as we expect further operational improvements and comparable sales growth in the year to be back-end loaded, supported by a strong order book", it said in a statement.

Adjusted EBITA improved 15% to 439 million euros, or 10.2% of sales, from 383 million euros, or 9.3% of sales, last year. In Amsterdam, PHIA shares jumped 3.0% to €31.92; the price rose 3.2% to $36.08 each in pre-market trading in NY.

"In line with our capital allocation policy, which aims at a balanced mix of investments in organic and inorganic growth opportunities, actions to drive balance sheet efficiency and returns to shareholders, we also announced a new EUR1.5 billion share buyback program to be launched in the third quarter of 2017", Mr. van Houten said.

Although all divisions reported constant-currency sales growth, Philips said its personal health arm, which sells consumer products including toothbrushes as well as machines to relieve sleep apnea, delivered the strongest growth at 6%.

Material from Reuters was used in this report.

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