Royal Philips (NYSE: PHG), the Dutch electronics giant, reported its financial results for the second quarter of 2024, showing a 2% increase in group sales to €4.5 billion (USD 4.9 billion) on a year-over-year basis, excluding currency impacts. This positive performance was met with a significant stock price increase of 13.4% in a single day, likely due to the company’s improving profitability. Comparable order intake rose by 9%, and operational income more than tripled to €816 million from €221 million in the previous year. The adjusted EBITA (earnings before interest, tax, amortization) margin also saw a notable rise, reaching 11.1% of sales.
CEO Roy Jakobs attributed the strong performance to robust growth in order intake, particularly in the North American region, and highlighted the company’s efforts to reduce costs and enhance margins amidst challenging macroeconomic conditions.
However, Philips’ global growth was partially offset by a decline in the Chinese market, where sales dropped from €715 million (USD 775 million) in Q2’23 to €651 million (USD 705 million) in Q2’24. Despite viewing China as a fundamentally attractive market with strong underlying demand, Philips noted that recent anti-corruption measures by the Chinese government have impacted short-term hospital order lead times. The China market’s downturn was particularly detrimental to both Philips’ Personal Healthcare and Connected Care business segments.- Flcube.com
