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MarketScreener Homepage  >  Equities  >  Euronext Amsterdam  >  Koninklijke Philips N.V.    PHIA   NL0000009538

KONINKLIJKE PHILIPS N.V.

(PHIA)
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Koninklijke Philips N : Surging demand for medical equipment puts Philips on course for second-half recovery

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07/20/2020 | 05:04am EDT
Dutch health technology company Philips presents the company's financial results for the fourth quarter in Amsterdam

Electrical equipment maker Philips said a recent surge in orders for scanners and other medical equipment should enable group sales and margins to rebound over the next six months from a slump in the second quarter.

The Dutch company, which makes products ranging from electrical toothbrushes to high-end hospital equipment, said its core earnings fell by almost a quarter in April-June to 418 million euros ($479 million) as sales dropped 6% to 4.4 billion euros, hit by the impact on demand of the coronavirus pandemic.

The results, however, were better than analysts had expected. While the pandemic had hit demand for some products in the second quarter, Philips said the virus had also spurred a 27% increase in new orders as hospitals rushed to buy CT scanners, ventilators and monitoring equipment needed to help patients battling the respiratory disease.

Shares in the company were up 4.3% in late morning trade making them the only notable winner on Amsterdam's blue chip AEX index.

A company-compiled poll of analysts had predicted second-quarter adjusted EBITA would drop to 344 million euros, on sales of 4.34 billion euros.

"For the full year 2020 we continue to aim for a modest comparable sales growth and adjusted EBITA margin improvement," Chief Executive Frans van Houten told a media call.

The surge in new orders in the second quarter followed on from a 23% rise in orders in the first quarter, reflecting strong demand for medical equipment during the pandemic. In the second quarter of last year, the group's total new orders rose by just 8%.

Longer term, van Houten said the pandemic had led hospitals to look at ways to better deal with highly infectious diseases.

This includes the need for devices that enable careworkers to remotely monitor patients, which are at the heart of Philips' strategy to make better use of patient data and internet technology to enable patients to remain at home, he said.

"Hospitals want to create a more resilient infrastructure where patients that are infected can be treated in a different way and elective procedures can continue", Van Houten said.

"That bodes well for Philips, also beyond 2020."

CHINA RECOVERY STAGNATES

Philips shares have in recent months recovered to levels seen at the end of 2019, after losing over a third of their value in the first quarter of this year.

"Philips reported a much better than expected second quarter update", ING analyst Marc Hesselink said, adding that he expected Philips to meet its growth outlook for the year.

Van Houten said the results were helped by a stronger than anticipated rebound in consumer demand in Europe, but the recovery in China had stagnated after an initial surge when lockdowns were eased.

(Reporting by Bart Meijer; Editing by Kim Coghill and Susan Fenton)

By Bart H. Meijer


Stocks mentioned in the article
ChangeLast1st jan.
AEX 0.06% 534.43 Real-time Quote.-9.75%
KONINKLIJKE PHILIPS N.V. -0.91% 40.12 Delayed Quote.-5.94%
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Financials
Sales 2020 19 621 M 22 913 M 22 913 M
Net income 2020 1 271 M 1 485 M 1 485 M
Net Debt 2020 3 335 M 3 895 M 3 895 M
P/E ratio 2020 28,9x
Yield 2020 2,11%
Capitalization 36 488 M 42 547 M 42 609 M
EV / Sales 2020 2,03x
EV / Sales 2021 1,96x
Nbr of Employees 80 718
Free-Float 99,7%
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Technical analysis trends KONINKLIJKE PHILIPS N.V.
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TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 24
Average target price 48,61 €
Last Close Price 40,12 €
Spread / Highest target 44,6%
Spread / Average Target 21,2%
Spread / Lowest Target -5,28%
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Managers
NameTitle
Frans van Houten Chief Executive Officer
Jeroen van der Veer Chairman-Supervisory Board
Sophie Bechu Chief Operating Officer & Executive Vice President
Abhijit Bhattacharya Chief Financial Officer & Executive Vice President
Jan Kimpen Chief Medical Officer
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