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Philips reported a Q2 net income of $229 million. On a per-share basis, profit was 25 cents. Earnings, adjusted for one-time gains and costs, came to 39 cents per share. PHIA stock is rising.
Dutch consumer electronics giant Koninklijke Philips NV (AMS: PHIA) reported on Monday that its Q2 sales amounted to €4.4 billion, with a 6% comparable sales decline. Comparable order intake grew by 27% while the income from continuing operations stood at €213 million, compared to €260 million in Q2 2019. The adjusted EBITA margin was 9.5% of sales that was a bit lower in comparison to 11.8% of sales in Q2 last year. Income from operations amounted to €229 million, compared to €350 million in Q2 2019.
EPS from continuing operations (diluted) amounted to €0.23 while the adjusted EPS amounted to €0.35, 16.6.% less than €0.42 that was the case in Q2 2019.
At the time of writing after the Q2 results, Philips stock was rising by 5.03% to €45.62.
Impact of Coronavirus on Philips Performance Intensified in Q2
Operating cash flow improved to €558 million, 35% less than in Q2 2019 when it was €390 million. Free cash flow increased to €311 million, which represents a 79% rise compared to €174 million in Q2 2019. In the second quarter, procurement savings amounted to €57 million. Overhead and other productivity programs delivered savings of €51 million. As a result, Philips is on track to deliver more than €400 million productivity savings for 2020 and €1.8 billion productivity savings for the Group for the 2017-2020 period.
Philips’ CEO Frans van Houten stated:
“As the global societal and economic impact of the COVID-19 outbreak intensified in the second quarter of 2020, we continued to focus on our triple duty of care: meeting critical customer needs, safeguarding the health and safety of our employees, and ensuring business continuity.”
He added that as expected, COVID-19 caused a huge fall in consumer demand and suspension of installations in hospitals, as well as elective procedures, resulting in a 19% comparable sales decrease for the company’s Personal Health businesses and a 9% decline for the Diagnosis & Treatment businesses. This was partly offset by a strong 14% comparable sales growth for our Connected Care businesses.
Van Houten also said that looking ahead, the company’s mission is more important than ever. The strategy is focusing on transforming the “delivery of care along the health continuum, leveraging informatics and remote care capabilities”, together with the company’s innovative systems and services, has been validated during this crisis. “I am convinced that Philips is well-positioned to serve the current and future needs of hospitals and health systems,” Van Houten concluded.