COVID-19 pandemic hampers Q1 financial results for imaging giant Philips
Royal Philips has seen a slight uptick in orders for imaging systems during the COVID-19 pandemic. However, the crisis has dragged down overall financial results for the Amsterdam-based manufacturer in 2020.
All told, Philips reported sales of more than $4.56 billion USD for the first three months of the year, a 2% dip compared to the same time span in 2019. The company logged almost $47 million in income from operations in the quarter that ended March 31, versus $266 million last year, Philips announced Monday.
“COVID-19 significantly affected our results in this quarter,” CEO Frans van Houten said in an April 20 statement. “We expect that all our geographies will be impacted throughout the second quarter,” he added later. “This is expected to result in a steep revenue decline for our personal health businesses and a sizable high single-digit decline for our diagnosis and treatment businesses.”
In one bright spot, Philips saw a 23% increase in comparable order intake, year over year, with growing demand for diagnostic imaging systems, hospital ventilators and patient monitors. To respond to that surge, van Houten said they’re investing $108.6 million to “steeply ramp up” production volumes.
With many hospitals and practices pushing off nonurgent procedures, Philips also reported a dip in image-guided therapy procedures. Officials said this week that if they can convert orders for diagnostic imaging systems and other products, they hope to return to growth and improved profitability in the coming months.
“Consequently, for the full year 2020 we aim to achieve a modest comparable sales growth and adjusted [earnings before interest, taxes and amortization] margin improvement,” van Houten added. “Given the current uncertainty and volatility, we will not provide more specific guidance for 2020 at this time.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.