PHG Stock (Koninklijke Philips Electronics) a Dutch multinational conglomerate corporation engaging in healthcare, lighting, and consumer-oriented markets, announced a substantial increase in quarterly profit as the COVID-19 pandemic accelerated the demand for hospitals equipment and healthcare products.
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At last check in premarket trading, shares of Koninklijke Philips N.V. (PHG) was down 2.90% at $59.33. Shares of the company fluctuated between $60.3158 and $61.23 throughout the day. For the last six months, the stock has soared 23.01%, and over the last three months, the stock has climbed by 9.97%
First-quarter highlights
Philips reported its core earnings climbed by 74% in the first quarter reaching $438 million. This accounted for a 9% rise in comparable sales, which induced investor interest for the company. However net profit remained stable at 40 million euros in Q1, as approximately 250M Euros were spent on minimizing risk detected in some of their healthcare respiratory devices.
After the contractual agreement for the sale of domestic appliances to global investment firm Hillhouse Capital, the business was announced to be discontinued as of the first quarter of 2021. However previous years result was restated to depict the 3.7-billion-euro sale of Philips’ household appliances business to Hillhouse Capital.
Comparable order intake plummeted by 5%, with rapid growth in the Diagnosis & Treatment businesses and faced a significant drop in the Connected Care which had an 80% growth in Q1 of 2020. Operating cash flow saw an increase to EUR 321 million, vs EUR 181 million in the same quarter of the previous year.
PHG Business objectives
Philips initiated several strategic partnerships in North America, Europe and Asia, which also consist of a 5-year deal with Spanish healthcare group Vithas. Various Diagnostic imaging systems as well as advanced informatics, and image-guided therapy solutions will be provided to Vithas by Philips, specializing to enhance patient experience.
Philips has manufactured its 100 millionth OneBlade, only after 5 years of its official release. The Philips OneBladehas penetrated the market globally and has built a new category in the shaving space.
Philips has also launched The Medical Tablet, a monitoring kit established to assist physicians to monitor patients in large volumes. This new offering will be made available to North America, Europe, and Japan and will provide remote access to patient data for enhanced patient healthcare. In the first quarter, procurement savings accounted for EUR 44 million.
Conclusion:
Philips offered a better-than-expected outlook for the current quarter, and are anticipated to produce a decent profit in the future as the company further diversifies its product line. Furthermore, lucrative strategic partnerships combined with focus on consumer orientation and a strong financial report has induced investor expectation from the company.
