Philips Q1 Profit Climbs, Reaffirms Outlook; Stock Up

Shares of Philips Electronics NV (PHGFF.PK,PHG) were gaining around 3 percent in the morning trading after the Dutch consumer electronics giant reported Monday higher profit in its first quarter with increased sales and order intake.

Looking ahead, the company reaffirmed its overall targets of 4 percent to 6 percent comparable sales growth and an adjusted EBITA margin improvement of 100 basis points on average per year for the 2017-2020 period.

Chief Executive Officer Frans van Houten said, “We continue to expect our performance momentum to improve over the course of the year, based on the demand for our innovative products and solutions to improve people’s health and enhance care provider productivity, supported by our order book.”

For the first quarter, net income grew to 162 million euros from last year’s 124 million euros last year. Earnings per share improved to 0.18 euro from 0.13 euro in the prior year.

Income from continuing operations increased to 171 million euros from 94 million euros in the prior year. Income from operations grew to 245 million euros from 201 million euros last year. Operating margin grew to 5.9 percent from 5.1 percent a year ago.

Adjusted EBITA margin was 8.8 percent of sales, compared to 8.7 percent of sales last year. Adjusted EBITDA climbed to 576 million euros from prior year’s 512 million euros. Adjusted EBITDA margin was 13.9 percent, up from 13 percent last year.

Sales for the quarter grew about 5 percent to 4.15 billion euros from 3.94 billion euros last year. comparable sales growth was 2 percent.

Sales in growth geographies increased 10 percent on a comparable basis, reflecting double-digit growth in China and Central & Eastern Europe. In mature geographies, sales decreased 1 percent due to flat sales in Western Europe and a low-single-digit decline in North America and other mature geographies.

Comparable order intake increased 2 percent.

Philips shares were trading at 37.10 euros, up 2.56 percent.

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