Shares in Royal Philips (NYSE:PHG) fell slightly yesterday after the medical device maker posted first quarter earnings that saw profits and sales grow compared with the same period during the previous year.
The Amsterdam-based company reported sales of $181.7 million (EU €162 million), or 21¢ per share (EU €0.19), on sales of approximately $4.66 billion (EU €4.15 billion) for the three months ended March 31, seeing profits grow by 23.5% while sales grew 5% compared with the same period during the previous year.
Adjusted to exclude one-time items, earnings per share were 33¢ (EU €0.29), the company said.
Along with the earnings report, Philips said that it still believes the restructuring effort it launched in January will help simplify its business organization.
“It is a little early to discuss how this affected our business, but we are very confident that with this re-alignment we are taking the necessary steps to simplify our business set-up and drive our solutions approach,” company spokesperson Ben Zwirs said in an email with MassDevice.com.
The device maker also said that the company still intends to “fully sell down our stake over time” in its former lighting business, now called Signify, but that it is “not in a hurry” to do so. Philips sold off approximately $641.8 million in shares of the legacy lighting company last March.
The company is also open to picking up more complimentary acquisitions looking forward, Zwirs said.
“I think it is important to stress that Philips has a well-balanced capital allocation policy, which consists of investments in R&D and high-return organic growth opportunities, dividend and share buybacks, and a disciplined but more active approach to M&A. Looking forward, we are in a healthy situation: the balance sheet would permit more M&A. So if a good opportunity presents itself we are still on the lookout for complementary acquisitions,” Zwirs said in an email.
“We had a reasonable start to the year, as we delivered 2% comparable sales and order intake growth, further building on strong growth in 2018. I am encouraged that the measures taken in the Personal Health businesses resulted in regained momentum and a step-up of sales growth, which was led by the high-teens comparable sales growth in the Oral Healthcare business. Moreover, I am pleased with the double-digit comparable sales and order intake growth for the Group in the growth geographies. We continue to expect our performance momentum to improve over the course of the year, based on the demand for our innovative products and solutions to improve people’s health and enhance care provider productivity, supported by our order book. We reaffirm our overall targets of 4-6% comparable sales growth and an Adjusted EBITA margin improvement of 100 basis points on average per year for the 2017–2020 period,” CEO Frans van Houten said in a press release.
Shares in Philips fell approximately 1.1% yesterday, closing at $41.16. Stock prices have recovered today, up approximately 3% as of 11:26 am. EDT.
Last week, Philips sold its Andover, Mass.-based healthcare headquarters in a deal worth $36 million, according to a recent report.
* A previous version of this publication listed incorrect sales, profits and EPS for Philips based on reversed 2018/2019 data from the company’s press release *
