Philips (NYSE:PHG) shocked investors today with a turnaround 1st quarter that topped expectations and then some, fueled in part by double-digit sales and earnings increases from its Philips Healthcare division.
The Dutch conglomerate reported profits of about $326.9 million (€249M), or 40¢ (€.027) per share, on sales of $7.36 billion (€5.61B) for the 3 months ended March 31. Analysts polled by Reuters were looking for profits of €186 million on sales of €5.44 billion.
The results had PHG shares up more than 6% early Monday. Shares were trading at $19.54 apiece as of about noon today on Wall Street, up 4.0% on the day.
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Philips Healthcare reported earnings before interest and taxes of $229.8 million (€175M) on sales of $2.90 billion (€2.21B), up 26.8% and 12.1%, respectively, over the same period last year.
"Healthcare sales and order intake showed robust growth," CEO Frans van Houten said in prepared remarks. "We remain cautious about the remainder of 2012, given the uncertainties in Europe, particularly in the healthcare and construction markets, and the slowing growth rate in the lobal economy."
The healthcare segment, Philips’ largest, is busy undergoing a shift in the executive suite after ex-CEO Steve Ruskowski left to take the corner office at Quest Diagnostics (NYSE:DGX) earlier this month. That meant a promotion for Deborah DiSanzo, CEO of Philips’ patient care and clinical informatics operation.
"Deborah is a [Philips] Healthcare veteran who, with her highly successful track record in Philips, provides continuity to our largest sector," van Houten said.
Philips Healthcare said comparable sales rose 9% over Q1 2011, "driven by double-digit growth at patient care & clinical informatics and imaging systems. Mid-single-digit growth was seen at customer services and home healthcare solutions."
Sales in "growth geographies" surged 27%, although "mature market" sales rose by only 5%, partially driven by "sales that did not materialize in Q4 2011."
