The Amsterdam-based company posted profits of $42.4 million (€39 million), or 5¢ per share, on sales of $4.5 billion (€4.2 billion) for the three months ended March 31, marking a 75.9% bottom-line slide on a sales increase of 0.2%.
Adjusted to exclude one-time items, earnings per share were 20¢, a 12¢ drop from the same quarter last year.
According to a news release, Philips saw 23% growth in comparable order intake during the quarter amid the COVID-19 pandemic, notably in diagnostic imaging, hospital ventilators and patient monitors. The company is investing more than €100 million to ramp up production. Meanwhile, a decline in demand for personal health products resulted in sales decreases.
COVID-19 initially affected Philips’ business in China and Asia Pacific in January, then began affecting its businesses across the world, leading the company to anticipate an impact across all its geographies throughout the second quarter.
“The start of 2020 was marked by the COVID-19 outbreak, and we have mobilized our resources since January to address this unprecedented challenge,” Philips CEO Frans van Houten said in the news release. “At Philips, we are focused on our triple duty of care: meeting critical customer needs, safeguarding the health and safety of our employees, and ensuring business continuity. I am very proud of the commitment, hard work and resourcefulness of our employees to keep Philips fully functioning, and I would like to thank them for that.”
Like many other companies, Philips said it is not offering sales guidance for 2020 because COVID-19 is rendering it difficult to predict how the rest of the year will turn out.
Van Houten said the company anticipates second-quarter revenue declines in its personal health business and its diagnosis & treatment businesses. Philips is hoping for modest comparable full-year sales growth and adjusted EBITA margin improvement.
PHG shares were up 5.4% at $43.32 per share in midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up 0.5%.