Philips Profit Lifted by Lighting Business Spinoff
24 October 2016 - 9:32PM
Dow Jones News
By Maarten van Tartwijk
AMSTERDAM--The Netherlands' Royal Philips NV said Monday its
third-quarter earnings further improved following the spin-off of
its lighting business.
Adjusted earnings before interest, taxes and amortization were
EUR649 million ($705.26 million), a 14% rise compared with the same
period last year and ahead of analyst expectations. Sales rose 1%
to EUR5.9 billion, while net profit jumped 18% to EUR383
million.
Philips shares rose by around 4.5% in Amsterdam.
The Dutch group in May spun off its lighting division through an
initial public offering in a bid to focus on its faster-growing and
more profitable health-care business. General Electric Co. and
Siemens AG are its most important competitors in this market.
The health-care business, which sells everything from electric
toothbrushes to ultrasound machines, recorded comparable sales
growth of 5% in the third quarter, while order intake grew by
8%.
The introduction of new products and savings generated from the
$1 billion acquisition of Volcano Corp., a U.S. medical-imaging
company, were the main drivers, Philips said.
The lighting business, in which Philips still holds a 71% stake,
recorded a comparable sales decline of 3% but cost-savings helped
to push adjusted Ebita 26% higher. Philips plans to gradually sell
its stake in the coming years.
Philips maintained its full-year outlook and said it expects
earnings to further improve in the fourth quarter despite ongoing
concerns about "risk due to volatility in the markets in which we
operate."
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
(END) Dow Jones Newswires
October 24, 2016 06:17 ET (10:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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