Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Philips lifts 2021 forecast as Q1 sales soar amid pandemic

Stock MarketsApr 26, 2021 04:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Logo of Dutch technology company Philips is seen at its company headquarters in Amsterdam

By Bart H. Meijer

AMSTERDAM (Reuters) - Philips posted a hefty jump in quarterly profit on Monday and nudged its expectations for 2021 higher as the coronavirus pandemic drives demand for its hospital equipment and personal health appliances.

The Dutch health technology company said core earnings surged 74% in the first quarter to 362 million euros ($438 million) compared with the year earlier period, on a 9% rise in comparable sales, easily beating analysts' expectations.

"Revenue growth was a bit stronger than we originally expected", Chief Executive Frans van Houten told reporters.

"On that basis and expecting a strong second quarter, we are raising our guidance."

Philips, which sells products ranging from electrical toothbrushes to medical imaging systems, said it now expects "low-to-mid-single-digit comparable sales growth" for 2021, up from earlier guidance for low growth.

All business segments and markets contributed to the strong growth in the first months of 2021, Van Houten said, as hospitals resumed elective procedures and investments which were put on hold during the first wave of the pandemic last year.

Demand also remained strong at the Connected Care division, which supplies equipment needed to treat COVID-19 patients such as respiratory machines and monitoring and software platforms that allow remote care.

Philips still expects the growth of this division to slow over the course of this year, following a surge in demand in the second half of 2020.

The company's shares openend roughly flat on Monday, having risen around 15% since the start of the year.

PROVISION DAMPENS NET PROFIT

However, Philips also said it had made a 250 million euro provision to deal with risks it detected in some of its respiratory care devices.

It said sound abatement foam used in some of its sleep and respiratory care devices could degrade when cleaned incorrectly or when used in hot and humid conditions.

"We have seen a very low incident rate", Van Houten said. "But out of precaution we feel we need to take action and repair affected machines and change this component."

The provision meant net profit was stable at 40 million euros in the first quarter from the year earlier period.

Analysts had expected 326 million euros in adjusted earnings before interest, taxes and amortisation (EBITA) and a 6% rise in comparable sales.

Last year's results were restated to reflect the 3.7 billion euro sale of the household appliances business to Hillhouse Capital announced last month.

($1 = 0.8260 euros)

Philips lifts 2021 forecast as Q1 sales soar amid pandemic
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email