The Amsterdam-based company posted profits of $240.4 (€210 million), or 26¢ (€0.23) per share, on sales of $5 billion (€4.4 billion) for the three months ended June 30, 2020, for a -14.6% bottom-line slide on a sales decline of -5.9%.
Adjusted to exclude one-time items, earnings per share were 40¢ (€0.35), while the sales totals edged Wall Street projections, as analysts were looking for sales of $4.98 billion (€4.35 billion).
The impact of the COVID-19 pandemic included a decrease in consumer demand as hospital installations and elective procedures were postponed for long stretches throughout the last few months.
Additionally, Philips recorded a 19% comparable sales decrease for its personal health business and a 9% drop in diagnosis & treatment business. However, its connected care business saw 14% growth to help offset those segment slides.
“As the global societal and economic impact of the COVID-19 outbreak intensified in the second quarter of 2020, we continued to focus on our triple duty of care: meeting critical customer needs, safeguarding the health and safety of our employees, and ensuring business continuity,” Philips CEO Frans van Houten said in a news release. “In close collaboration with our suppliers and partners, we have steeply ramped up the production volumes of acute care products and solutions to help diagnose, treat, monitor and manage COVID-19 patients. Our field service engineers have been supporting healthcare providers around the world throughout these testing times.
“Under the circumstances, I am pleased at the way we have performed and I am grateful and proud of how all our employees have stepped up.”
Philips did not offer financial guidance for the full year 2020, with many uncertainties remaining as a result of the COVID-19 pandemic. However, van Houten said he expects to return to growth and improved profitability in the second half of the year with an aim for a modest comparable sales growth and adjusted EBITA margin improvement.
PHG shares closed up 4.7% at $52.10 per share at the end of trading on Monday. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up 0.32%.
$1 = €0.873490