January 30, 2018 / 6:28 AM / 22 days ago

Philips delivers on fourth quarter sales growth on higher order intake

AMSTERDAM (Reuters) - Dutch health technology company Philips on Tuesday said its fourth-quarter sales grew 5 percent to 5.3 billion euros ($6.55 billion), buoyed by a rise in orders for high-end hospital equipment.

The company’s intake of orders rose 7 percent, and sales growth was in line with expectations of analysts polled for Reuters.

“We finished 2017 on a firm note,” Chief Executive Frans van Houten said in a statement. “With our strong order book, we are confident that we will deliver on our mid-term targets this year.”

Sales growth accelerated slightly in the last three months of 2017, taking the total for the year to 4 percent, just in line with Philips’ ambition of a 4-6 percent annual rise.

Order growth in the fourth quarter was strongest in North America and China, where hospitals stocked up on medical scanners and imaging tools used during surgery.

This led to a 6 percent sales growth for the Diagnostics & Treatment division, which was matched by the Personal Health arm, selling consumer products such as toothbrushes and machines to relieve sleep apnea.

Philips said its adjusted earnings before interest, taxes and amortisation (EBITA) rose 9 percent in the fourth quarter to 884 million euros. Net income surged 40 percent to 899 million euros.

Philips’ profit margin improved by 110 basis points in 2017, to 12.1 percent of sales, surpassing the company’s own goal by 10 percent as cost savings were higher than expected.

Reporting by Bart Meijer; Editing by Sherry Jacob-Phillips and Sunil Nair

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