Royal Philips (NYSE:PHG) said today that it’s shedding a layer of management for its Philips Healthcare business after reported lower-than-expected earnings for the 2nd quarter, meaning the departure of Philips Healthcare CEO Deborah DiSanzo.
The healthcare unit will report directly to Royal Philips CEO Frans van Houten, the company said.
Philips said it expects 2nd-quarter earnings before interest, taxes & amortization to be roughly €220 million ($299 million); analysts were looking for EBITA of €258 million ($351 million) for the healthcare division. Overall EBITA for Philips is slated to be €400 million ($544 million), in line with expectations, according to a press release.
The bottom line is expected to improve for Philips Healthcare after a Cleveland imaging device plant goes back online later this year. Production at the plant was suspended in January after FDA inspections turned up a raft of violations last year.
“Our healthcare business represents more than 40% of the revenue of Philips and is at the heart of Philips’ mission to deliver meaningful innovation to improve people’s lives. Today’s announcement is an example of how we are taking decisive action to improve our performance and competitiveness, and demonstrates our relentless commitment to quality and meaningful innovation that meet the needs of our customers,” van Houten said in prepared remarks. “I want to thank Deborah for her leadership of the healthcare business and wish her the very best with her future endeavors.”
Philips is scheduled to release its full Q2 results July 21.