Philips Electronics reported a profit in its fourth quarter, compared to last year's loss, mainly reflecting higher sales in its HealthTech portfolio, partly offset by weakness in Lighting.
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The company also revealed that it is currently in discussions with the U.S. Department of Justice regarding its external defibrillator business in the U.S. The discussions are yet to conclude, while the company said it anticipates a meaningful impact on the operations of this business.
Looking ahead, the company said that despite elevated uncertainty in its operating markets, it will continue to improve underlying performance and target to deliver 4-6 percent comparable sales growth and, on average, a 100-basis-point improvement in adjusted EBITA per year for the next three to four years.
Meanwhile, Bloomberg reported that Philips CEO Frans van Houten, in an interview, warned of a more unpredictable business environment in the U.S. following Donald Trump's election as U.S. President.
For the fourth quarter, net income attributable to shareholders was 626 million euros or 0.67 euros per share, compared to a loss of 45 million euros or 0.05 euros per share last year.
EBITA for the fourth quarter totaled 914 million euros, or 12.6 percent of sales, compared to 263 million euros, or 3.7 percent of sales in the previous year.
Adjusted EBITA for the quarter improved by 159 million euros and the margin improved by 190 basis points compared to the previous year to 15.3 percent. The improvement was mainly attributable to higher volumes and cost productivity, partly offset by higher expenditure for growth initiatives and innovation.
Sales increased to 7.24 billion euros from last year's 7.10 billion euros. Group consolidated comparable sales growth was 3 percent, with comparable sales growth of 5 percent in the HealthTech portfolio.
All segments in HealthTech portfolio showed improvement in the quarter. Comparable sales in the Personal Health business grew 7 percent, in the Diagnosis & Treatment businesses grew 3 percent, and the increase was 4 percent in Connected Care &Health Informatics units. Order intake in the quarter on a currency- comparable basis, was inline with last year's strong quarter.
Philips Lighting, in which Philips holds a 71.225 percent stake, recorded 3 percent lower comparable sales in the quarter, while its adjusted EBITA grew 180 basis points.
For fiscal 2016, net income surged to 1.5 billion euros from 659 million euros last year. Sales of 24.5 billion euros grew 3 percent on a consolidated comparable basis.
Further, the company announced a proposal to maintain dividend at 0.80 euro per share. ■