(Bloomberg) -- Dutch health-technology company Royal Philips NV reported third-quarter profit that missed analyst estimates, while growth at the personal-health division also disappointed.

Key Insights

  • The growth rate of Philips’s personal-health unit, which contributes the most to its profit, was 4 percent, in line with Chief Executive Officer Frans van Houten’s prediction of an improvement in the personal-health business over the second half of 2018. However, it also fell short of an analyst’s estimate of a 5.3 percent growth.
  • “I am encouraged by the step-up in sales growth of the personal-health businesses compared with the first half of 2018, but the recovery was slower than expected as good growth in our growth geographies was partially offset by lower growth in our mature geographies,” the CEO said
  • “Despite emerging-market currency headwinds, margins should be supported by restructuring, improved sales for higher-priced imaging equipment, and a weaker euro versus the dollar in the second half of the year,” analysts of Bloomberg Intelligence said ahead of the earnings release.
  • Amsterdam-based Philips said an adverse impact of emerging-market currencies on sales was 60 basis points.

Know More

  • The Dutch health-care technology company said in a statement Monday that its third-quarter adjusted earnings before interest, taxes and amortization increased to 568 million euros from 532 million euros a year earlier. Analysts expected 584 million euros. Sales advanced to 4.3 billion euros, in line with the company-compiled estimate.
  • Philips reiterates its targets for the 2017-2020 period of a 4-6 percent comparable sales growth and an average annual 100 basis points improvement in adjusted Ebita margin.
  • In the third quarter, Philips reached a 4 percent sales growth, at the lower end of 4-6% annual organic growth guidance

To contact the reporter on this story: Ellen Proper in Amsterdam at eproper@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Bowker, Tara Patel

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