Philips first-quarter core profit misses estimates on bleak sales

© Reuters. FILE PHOTO: Dutch health technology company Philips presents the company’s financial results for the fourth quarter in Amsterdam

AMSTERDAM (Reuters) – Dutch health technology company Philips on Monday posted a 6 percent rise in first-quarter core earnings, but missed analysts’ expectations on bleak sales growth.

A decline in demand for hospital equipment in Europe and flat sales in the United States capped overall comparable sales growth to 2 percent, despite upbeat numbers in China and other emerging markets.

The company’s core profit came in at 364 million euros (£314.4 million), compared with 344 million euros in the previous year.

Analysts polled for Reuters had expected adjusted earnings before interest, taxes and amortisation (EBITA) of 371 million euros, while comparable sales missed expectations of a 2.4 percent growth.

The company reaffirmed its target for total comparable sales growth of 4 to 6 percent per year until 2020.

“We continue to expect our performance momentum to improve over the course of the year … supported by our order book,” Chief Executive Frans van Houten said.

Philips reported sales growth of 2 to 5 percent for its two largest businesses – hospital equipment and personal healthcare products. Sales of its connected care division, which specialises in remote patient monitoring, dropped 1 percent.

Once a sprawling conglomerate, Philips has transformed itself into a health technology specialist in recent years, shedding its consumer electronics and lighting divisions.

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