Philips' New Imaging Solution Expands Healthcare Portfolio

Philips (NYSE:PHG) is gradually evolving as a healthcare company, primarily driven by an expanding Diagnosis & Treatment business, which accounted for 45% of net sales in the last-reported quarter.

The segment generated third-quarter revenues of €2.12 billion, reflecting 9% comparable sales growth driven by double-digit growth in Ultrasound and high single-digit rise in Image-Guided Therapy and Diagnostic Imaging.

Philips Unveils New Imaging Solution

The company recently unveiled its next-generation enterprise imaging solution designed to improve patient management at lower cost of care. The solution will be available in the first quarter of 2020.

The integrated solution includes diagnostic patient management application, forcare interoperability and enterprise operational informatics suite.

The diagnostic patient management application helps in improving patient interactions with their healthcare system before and after procedures.

The solution also includes a “vendor-neutral, zero-footprint enterprise viewer and a secure web portal” to provide patient access to relevant clinical information. Additionally, forcare interoperability enables smooth communication and data exchange between departments and stakeholders.

The enterprise operational informatics suite helps in improving the imaging department’s operational performance and productivity.

Furthermore, the enterprise imaging solution provides comprehensive diagnostic solutions for departments including radiology, cardiology, neurology, pathology, oncology, and breast imaging. It also provides multimedia reporting including EMR, RIS and PACS integration.

The solution’s clinical repository also includes a vendor neutral archive, an acquisition portal to capture images across departments and file formats and smart lifecycle management to provide storage and access.

Notably, the company recently launched IntelliSpace AI Workflow Suite that enables healthcare providers to seamlessly integrate AI applications into imaging workflow.

Heavy Investments, Acquisitions Strengthen Portfolio

Philips’ ongoing focus on innovation is helping it to strengthen its healthcare offerings. The company has been investing in research & development (R&D) as well as strategic acquisitions across all its segments in the recent past.

In the first nine months of 2019, Philips’ research & development expenses increased 5.2% year over year to €1.33 billion.

Moreover, a string of complementary acquisitions, namely Remote Diagnostic Technologies, Forcare and Analytical Informatics have strengthened its Diagnostic & Treatment business. In the third quarter, Philips expanded its enterprise diagnostic informatics portfolio with the completion of the acquisition of Carestream Health’s Healthcare Information Systems business.

Although increasing tariffs related to the U.S.-China trade are expected to hurt growth, Philips expects fourth-quarter profitability to improve driven by improved performance of the Diagnosis & Treatment and Personal Health businesses and a gradual recovery in Connected Care.

Zacks Rank & Stocks to Consider

Philips currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Baidu (NASDAQ:BIDU) , Marchex (NASDAQ:MCHX) and CommVault Systems (NASDAQ:CVLT) . All three stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Baidu, Marchex and CommVault is currently pegged at 2.3%, 15% and 10%, respectively.

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