Philips, the Dutch medical technology company, reported on Monday that its core earnings rose 32% in the third quarter, far better than expected, as the coronavirus pandemic spurred demand for hospital equipment.Philips said adjusted earnings before interest, tax, depreciation and amortisation (EBITA) rose to 769 million euros (US $901 million) from July to September, with comparable sales up 10 per cent to 4.98 billion euros, Philips said.
Analysts surveyed by the company expect an average core profit of 630 million euros and sales of 4.82 billion euros.
The main driver of growth was the networked medical sector, which provided monitoring and respiratory care equipment for patients with new crown pneumonia, with sales soaring by 42 per cent.
In updating its targets, Philips said it expects average sales growth of 5% to 6% between 2021 and 2025, and adjusted EBITA profit margins will increase by 60-80 basis points a year.
Novel coronavirus pneumonia is expected to grow at a low single digit rate in 2021, because the demand for new crown pneumonia devices is expected to cool.
Philips maintains expectations for moderate sales growth and stable EBITA margins for the whole of 2020.