Shares in Royal Philips rose after the Dutch health-technology company reported stronger profitability in the third quarter, driven by robust sales across the business.
Philips said its margin for adjusted earnings before interest, taxes, and amortization rose by 0.7 percentage point on year to 13%, with higher sales, gross margins and productivity efforts helping offset cost inflation.
Shares rose 6.6% in early European trading.
The margin result was a positive, quelling concerns over Philips's ability to deliver margin expectations for the full year, Natalia Webster at RBC Capital Markets said in a note.
Third-quarter sales rose to 4.39 billion euros, equivalent to $4.91 billion, from 4.30 billion euros in the same period a year earlier.
The company also said Tuesday that it was looking to move past a recall of sleep and respiratory products. Its Respironics subsidiary reached an agreement with the U.S. Justice Department to resolve previous criminal and civil investigations related to product recalls in the unit, Philips said.
The Enterprise Chamber of the Amsterdam Court of Appeal also denied investors' requests for further investigation into the matter in the third quarter, the company said.
Adjusted Ebita came in at 569 million euros compared with 531 million euros in the year-prior period. Analysts expected 522 million euros, according to a company-compiled consensus. Meanwhile, net profit fell to 27 million euros from 184 million euros.
Philips said it backed its guidance of comparable sales growth of 3% to 4.5% for the full year, with an adjusted Ebita margin of 13.5% to 14.0%.
Comments