Philips (NYSE:PHG) said its healthcare business managed to boost earnings by nearly 50% despite a 2.1% sales slide during the 2nd quarter that were driven by weaker orders from the U.S. and Europe.
Andover, Mass.-based Philips Healthcare reported earnings before interest and taxes of $500.7 million (€379.0 million) on sales of $3.12 billion (€2.36 billion) for the 3 months ended June 30, for EBIT growth of 46.3%
Overall, Philips logged profits of $418.8 million (€317.0 million), or 46¢ (€0.35) per share, on sales of $7.46 billion (€5.65 billion) during the quarter. That represents profit growth of 210.8% and sales growth of 1.3%
Philips said it laid off another 630 employees, or or about 0.5% of its workforce, since the end of the 1st quarter. The Dutch conglomerate has let some 4,354 workers go since Q2 2012, or about 3.6% of its global employees, including 617 cuts within Philips Healthcare, according to an SEC filing.
"At healthcare, order intake grew by 7%, supported by new product launches and significant customer wins. Sales were flat year-on-year, due to the weaker order intake growth in the previous quarters in the United States and Europe," CEO Frans van Houten said in prepared remarks. "Looking ahead to the second half of 2013, we are concerned about economic uncertainties around the world; however, we remain committed to reach our financial targets this year."
Philips said emerging economies help drive growth, saying comparable sales excluding exchange rate impacts were 10% in "growth economies," citing "strong growth in China and Latin America."
"Sales in mature geographies declined 3% year-on-year, with North America and Western Europe showing mid-single-digit and low-single-digit declines respectively," according to the release.