Recovery room

24 October 2016 By Dominic Elliott

The $27-billion Dutch healthcare technology company grew core sales 5 percent in the third quarter. Reductions in costly long-term debt will help earnings, but a full recovery hinges on Philips selling more of its weaker lighting business and a rise in European medical spending.

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Dutch healthcare technology company Philips on Oct. 24 reported a near one-fifth jump in third-quarter earnings on stronger revenue in its core business.

Philips reported net profit of 383 million euros, up from 324 million euros a year ago.

Comparable sales rose 2 percent to 5.9 billion euros. Chief Executive Frans van Houten said sales at the company's core "HealthTech" portfolio were up 5 percent, with order intake up 8 percent.

Adjusted earnings before interest, tax and amortisation (EBITA) - Philips' preferred profit measure - rose 14 percent to 649 million euros. Adjusted EBITA as a proportion of sales increased to 11 percent from 9.8 percent a year ago.

A Reuters analyst poll had forecast adjusted EBITA of 651 million euros.

Comparable sales in the company's recently-listed lighting division, in which Philips retains a 71-percent stake, fell 3 percent from a year earlier.

By 0901 BST, shares in Philips were trading at 27.40 euros, up 5 percent from the previous day's close. Shares in Philips Lighting were at 20.99 euros, down 0.5 percent.

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