Philips sales, earnings climb in Q4

Growth in almost all of its businesses helped Philips Medical Systems to 7% fourth-quarter sales growth after the effects of currency adjustments are taken into account.

For the quarter (end-December 31), the Andover, MA-based firm had 2.068 billion euros ($2.682 billion U.S.) in sales, up 2% on a nominal basis (before currency adjustments) and 7% on a comparable basis (after currency adjustments) compared with 2.029 billion euros ($2.631 billion) in the fourth quarter of 2005. The vendor had earnings before interest and tax (EBIT) of 311 million euros ($403.3 million), up from 267 million euros ($346.2 million) a year ago.

In quarterly highlights, sales growth was driven by double-digit growth in healthcare informatics and customer services, Philips said. iSite PACS sales grew almost 50% on a comparable basis, according to the firm.

EBIT improved, particularly in CT, nuclear medicine, and customer services, Philips said. Net underlying order intake for the fourth quarter was practically flat due to some adjustments to the company's existing order book, although 2006 equipment order intake climbed 6% on a currency-comparable basis compared with 2005.

Looking ahead, Philips said that its North American sales organization will be realigned to tighten customer focus and simplify sales processes. This is expected to result in a minor charge in the first quarter and an overall positive impact on full-year earnings, Philips said.

The first quarter will also include acquisition and integration charges of approximately 25 million euros ($32.4 million) related to its purchase of Intermagnetics. Philips expects that EBITA will reach 14% to 15% in 2007.

By AuntMinnie.com staff writers
January 22, 2007

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