Dutch consumer electronics giant Philips Electronics NV (PHGFF.PK,PHG) reported Monday lower net profit in its third quarter mainly due to the deconsolidation of Lighting. Profit from continuing operations climbed with improved margin and sales. Order intake also increased. The company noted that its operational improvements were partly offset by increased foreign exchange headwinds.
Looking ahead, the company reiterated targets for the 2017-2020 period of 4-6 percent comparable sales growth and an average annual 100 basis points improvement in adjusted EBITA margin.
For the third quarter, net income plunged to 292 million euros from 423 million euros last year. Earnings per share were 0.31 euro, down from 0.33 euro last year. The latest results included loss from discontinued operations of 15 million euros, while prior year’s results included profit of 160 million euros mainly related to Lighting unit.
Net income from continuing operations increased 17 percent to 307 million euros or 0.32 euro per share from 263 million euros or 0.28 euro per share a year ago.
Income from operations or EBIT increased to 451 million euros from prior year’s 299 million euros. Income from operations margin improved to 10.5 percent from 7.2 percent last year.
EBITA margin improved to 11.9 percent from prior year’s 8.8 percent. Adjusted EBITA margin improved by 40 basis points to 13.2 percent of sales.
Adjusted EBITDA grew to 750 million euros from 686 million euros last year, and adjusted EBITDA margin grew to 17.4 percent from 16.5 percent a year ago.
Sales in the quarter were 4.31 billion euros, 4 percent higher than last year’s 4.15 billion euros. Comparable sales growth was 4 percent reflecting mid-single-digit growth in the Diagnosis & Treatment businesses and the Personal Health businesses. Meanwhile, the Connected Care & Health Informatics businesses showed a low-single-digit decline compared to a very strong third quarter in 2017.
Comparable order intake increased 11 percent.
Philips shares settled at $39.95 on Friday at the NYSE, down 1.38 percent.
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