We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Philips (PHG) Q2 Earnings Rise, Revenues Fall Year Over Year
Read MoreHide Full Article
Koninklijke Philips N.V. (PHG - Free Report) reported second-quarter 2024 earnings of €0.48 per share, witnessing a significant rise from the year-ago quarter’s reported figure of €0.07 per share.
The company’s sales decreased 0.2% on a year-over-year basis to €4.46 billion.
Comparable sales (including adjustments for consolidation charges & currency effects) grew 1.5% year over year. The growth was attributed to strength across all segments.
Comparable sales in the Diagnosis & Treatment segment witnessed mid-single-digit growth, whereas the Connected Care and Personal Health businesses recorded low-single-digit growth.
Further, Philips’ comparable order intake increased 9% year over year in the reported quarter, primarily due to strong demand in China.
Sales improved 3% on a comparable basis in growth geographies. Sales in mature geographies were up 1% year over year on a comparable basis.
Koninklijke Philips N.V. Price, Consensus and EPS Surprise
Diagnosis & Treatment revenues rose 2.8% from the year-ago quarter to €2.17 billion. Comparable sales jumped 4.2% year over year, driven by double-digit growth in Precision Diagnosis and Image-Guided Therapy.
Connected Care revenues increased 0.4% year over year to €1.33 billion. Comparable sales grew 2%, driven by strong growth in Enterprise Informatics.
Personal Health revenues fell 0.2% year over year to €834 million. Comparable sales rose 2.2% year over year, owing to strength in Growth geographies.
Other segment sales amounted to €121 million, down 36.6% on a year-over-year basis.
Operating Details
Gross margin expanded 70 basis points (bps) on a year-over-year basis to 44.6% in the reported quarter.
General & administrative expenses, as a percentage of sales, were 3.5%, which remained flat on a year-over-year basis. Moreover, selling expenses expanded 40 bps to 25.3%. Research & development expenses dipped 100 bps to 9.5%.
Restructuring, acquisition-related and other items amounted to a net gain of €381 million compared with a loss of €161 million a year ago.
Operating model productivity, procurement and other productivity programs delivered savings of €57 million, €71 million and €67 million, respectively. This resulted in total savings of €195 million.
Phillips’ adjusted EBITA — the company’s preferred measure of operational performance — rose 9.3% year over year to €495 million. EBITA margin expanded 100 bps on a year-over-year basis to 11.1% in the reported quarter.
Diagnosis & Treatment’s adjusted EBITA margin expanded 160 bps on a year-over-year basis to 12.2%, primarily driven by improved sales, pricing and productivity measures. Connected Care’s adjusted EBITA margin was 8.8% in the reported quarter, which expanded 130 bps on a year-over-year basis.
Personal Health’s adjusted EBITA margin expanded 350 bps on a year-over-year basis to 16.9%.
Balance Sheet
As of Jun 30, 2024, Philips’ cash and cash equivalents were €1.8 billion compared with €1.4 billion as of Mar 31, 2024. Total debt was €8.265 billion compared with €7.737 billion as of Mar 31, 2024.
Operating cash inflow was €89 million against the year-ago quarter’s operating cash flow of €135 million.
Free cash outflow was €64 million against the year-ago quarter’s free cash flow of €5 million.
2024 Guidance
Philips expects to deliver 3-5% of comparable sales growth.
Further, adjusted EBITA margin is expected in the band of 11-11.5%.
Philips expects free cash flow to be between €900 million and €1.1 billion.
Zacks Rank & Stocks to Consider
Currently, Philips carries a Zacks Rank #4 (Sell).
Image: Bigstock
Philips (PHG) Q2 Earnings Rise, Revenues Fall Year Over Year
Koninklijke Philips N.V. (PHG - Free Report) reported second-quarter 2024 earnings of €0.48 per share, witnessing a significant rise from the year-ago quarter’s reported figure of €0.07 per share.
The company’s sales decreased 0.2% on a year-over-year basis to €4.46 billion.
Comparable sales (including adjustments for consolidation charges & currency effects) grew 1.5% year over year. The growth was attributed to strength across all segments.
Comparable sales in the Diagnosis & Treatment segment witnessed mid-single-digit growth, whereas the Connected Care and Personal Health businesses recorded low-single-digit growth.
Further, Philips’ comparable order intake increased 9% year over year in the reported quarter, primarily due to strong demand in China.
Sales improved 3% on a comparable basis in growth geographies. Sales in mature geographies were up 1% year over year on a comparable basis.
Koninklijke Philips N.V. Price, Consensus and EPS Surprise
Koninklijke Philips N.V. price-consensus-eps-surprise-chart | Koninklijke Philips N.V. Quote
Segmental Update
Diagnosis & Treatment revenues rose 2.8% from the year-ago quarter to €2.17 billion. Comparable sales jumped 4.2% year over year, driven by double-digit growth in Precision Diagnosis and Image-Guided Therapy.
Connected Care revenues increased 0.4% year over year to €1.33 billion. Comparable sales grew 2%, driven by strong growth in Enterprise Informatics.
Personal Health revenues fell 0.2% year over year to €834 million. Comparable sales rose 2.2% year over year, owing to strength in Growth geographies.
Other segment sales amounted to €121 million, down 36.6% on a year-over-year basis.
Operating Details
Gross margin expanded 70 basis points (bps) on a year-over-year basis to 44.6% in the reported quarter.
General & administrative expenses, as a percentage of sales, were 3.5%, which remained flat on a year-over-year basis. Moreover, selling expenses expanded 40 bps to 25.3%. Research & development expenses dipped 100 bps to 9.5%.
Restructuring, acquisition-related and other items amounted to a net gain of €381 million compared with a loss of €161 million a year ago.
Operating model productivity, procurement and other productivity programs delivered savings of €57 million, €71 million and €67 million, respectively. This resulted in total savings of €195 million.
Phillips’ adjusted EBITA — the company’s preferred measure of operational performance — rose 9.3% year over year to €495 million. EBITA margin expanded 100 bps on a year-over-year basis to 11.1% in the reported quarter.
Diagnosis & Treatment’s adjusted EBITA margin expanded 160 bps on a year-over-year basis to 12.2%, primarily driven by improved sales, pricing and productivity measures.
Connected Care’s adjusted EBITA margin was 8.8% in the reported quarter, which expanded 130 bps on a year-over-year basis.
Personal Health’s adjusted EBITA margin expanded 350 bps on a year-over-year basis to 16.9%.
Balance Sheet
As of Jun 30, 2024, Philips’ cash and cash equivalents were €1.8 billion compared with €1.4 billion as of Mar 31, 2024. Total debt was €8.265 billion compared with €7.737 billion as of Mar 31, 2024.
Operating cash inflow was €89 million against the year-ago quarter’s operating cash flow of €135 million.
Free cash outflow was €64 million against the year-ago quarter’s free cash flow of €5 million.
2024 Guidance
Philips expects to deliver 3-5% of comparable sales growth.
Further, adjusted EBITA margin is expected in the band of 11-11.5%.
Philips expects free cash flow to be between €900 million and €1.1 billion.
Zacks Rank & Stocks to Consider
Currently, Philips carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical market sector are Amedisys (AMED - Free Report) , Abbott Laboratories (ABT - Free Report) , and Akero Therapeutics (AKRO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amedisys shares have gained 11.2% in the year-to-date period. AMED’s long-term earnings growth rate is currently projected at 9.45%.
Abbott Laboratories shares have gained 14.6% in the year-to-date period. ABT’s long-term earnings growth rate is currently projected at 8.62%.
Akero Therapeutics shares have gained 39% in the year-to-date period. The long-term earnings growth rate for AKRO is currently projected at 8.63%.