Philips (NYSE: PHG) shares got a boost today on second-quarter results that came in ahead of the consensus forecast.
Shares of PHG went up 13.6% to $29.25 apiece in midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — rose 0.6%.
The earnings provided some good news for a company still grappling with a three-year-old recall involving millions of CPAP and BiPAP ventilators and other respiratory devices. (Here is a full timeline of the Philips Respironics recall.)
The Amsterdam-based medtech giant reported profits of approximately $488.95 million. That equals 36¢ per share on sales of $4.83 billion for the quarter ended June 30, 2024.
Philips significantly improved its bottom line from profits of $80 million a year ago. However, sales dipped slightly year-over-year from revenues of $4.84 billion.
Adjusted to exclude one-time items, earnings per share came in at 32¢. That landed 5¢ ahead of expectations on Wall Street. Philips also posted a sales beat as revenues narrowly topped projections of $4.82 billion.
The company reported a sales decline in China, but sales performance was bolstered by growth in mature and growth geographies.
Philips saw 4% growth in Diagnosis and Treatment, 2% growth in Connected Care and 2% growth in Personal Health. Image-guided therapy and precision diagnosis boosted the diagnostics unit, while enterprise informatics drove Connected Care.
“I am encouraged by our return to order intake growth this quarter, primarily driven by North America,” CEO Roy Jakobs said. “Within a challenging macro environment, we achieved strong margin improvement, supported by our productivity program, solid operational cashflow due to improved working capital management and comparable sales growth in line with our plan.
We continue to focus on enhancing execution, improving end-to-end supply chain resilience and increasing agility and productivity through simplifying our operating model. Patient safety and quality remains our number one priority.”
Philips reiterated its 2024 guidance for between 3% and 5% comparable sales growth. This excludes the impact of its ongoing legal proceedings for the Respironics recall, including a DOJ investigation.
