Dutch health technology company Philips said it expects sales growth to accelerate over the remainder of the year after US orders jumped 9 percent in the second quarter. Improving business in the group's biggest market, on top of a 15 percent rise in second-quarter core earnings sent Philips' shares up as much as 4 percent on Monday.
The group, which spun off its lighting division last year to focus on medical devices and healthcare products, cautioned that markets globally remained volatile and its overall outlook for 2017 was unchanged. In Western Europe, it reported an 8 percent rise in second-quarter sales but a 10 percent drop in orders.
US sales grew 4 percent in the first quarter from a year earlier, the fastest growth in more than a year and rebounding from a 2 percent slip in the first quarter. "Our growth in the weak US market proves that we are on the right path," Chief Executive Frans van Houten told Reuters in an interview. "Overall there is still a lot of uncertainty in the US, holding back investments by hospitals ... but we are outperforming competitors and winning market share." The group saw an 8 percent rise in new orders globally in the second quarter and van Houten said around half of those orders will turn into revenue before the end of the year, while cost savings would continue to improve profit margins. Philips, which has had regulatory problems in the United States in the past few years, agreed last month to buy Spectranetics Corp, a US maker of devices to treat heart disease, for 1.9 billion euros ($2.2 billion) as it expands its image-guided therapy business. On Monday it said its second quarter core profits rose 15 percent to 439 million euros ($511 million), with sales up 4 percent to 4.3 billion euros.
Comments
Comments are closed.