Philips sales edge higher in Q1, but earnings dip

Growth in its imaging systems unit contributed to a small increase in comparable sales for Philips Healthcare in its first quarter, but investments and remediation costs led to a decline in earnings.

For the period (end-31 March), Philips had sales of 2.261 billion euros, up 15% on a nominal basis and 1% on a comparable basis from the 1.966 billion euros reported in the first quarter of 2014. While the company's imaging systems and customer services units contributed sales growth in the midsingle digits, those gains were partially offset by a low single-digit decline in the vendor's healthcare informatics and solution and services operations.

Philips posted first-quarter earnings before interest, taxes, and amortization (EBITA) of 65 million euros, down sharply from EBITA of 152 million euros in the same period a year ago. The EBITA drop was due mainly to an increase in quality and regulatory spending, higher planned expenditures for growth initiatives in its healthcare informatics and solutions and services units, and currency impacts, Philips said.

In positive news, Philips said that its healthcare informatics and solutions and services units produced double-digit growth in currency-comparable order intake in the first quarter, while its imaging services business had order intake that was in line with the first quarter of 2014.

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