Q1 sales for Philips Healthcare jump 9%

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When Royal Philips Electronics announced its 2012 first quarter earnings, its Philips Healthcare unit showed a sales growth of 9 percent over the 2011 first quarter to EUR2.21 billion ($2.91 billion U.S.).

Comparable equipment order intake grew 7 percent quarter-over-quarter, with the strongest contribution (double digit) seen from patient care & clinical informatics. The orders for imaging systems were at the same level as 2011 first quarter. Mid-single digit growth was seen in custom services and home healthcare solutions. Geographically, equipment orders grew in North America by 5 percent, declined in Europe by 1 percent and showed its greatest growth in emerging markets at 22 percent.

The healthcare unit’s earnings before interest, tax and amortization came in at EUR225 million ($296.71 million U.S.), or 10.2 percent of sales, compared with EUR199 million ($262.57 million U.S.), or 10.1 percent, in the 2011 first quarter.

"I am encouraged by our results in the first quarter of 2012, which is a further step in the right direction for Philips on our path to value to achieve the mid-term 2013 financial targets ... Healthcare sales and order intake showed robust growth," said Frans van Houten, CEO of Royal Philips Electronics. "We remain cautious about the remainder of 2012 given the uncertainties in Europe, particularly in the healthcare and construction markets, and the slowing growth rate in the global economy."

The net operating capital for Philips Healthcare as of the first quarter of 2012 was lower at $8.04 billion, compared with $8.53 billion in the first quarter of 2011. The restructuring and acquisition-related charges in the second quarter of 2012 are expected to total approximately EUR5 million ($6.6 million U.S.), according to the company.

Finally, the healthcare unit has 1,259 more full-time employees in the 2012 first quarter—totaling 37,951, largely driven by increased investments in the sales and service channels, as well as an increase in industrial employees related to the continuing build-up of the industrial infrastructure in low-cost countries.