Weakness in European sales and delivery postponements of existing orders affected fourth-quarter results for Philips Healthcare, which posted a 3% increase in comparable, currency-adjusted sales while profit in the division fell.
For the quarter (end-December 31), the vendor produced sales of 2.72 billion euros ($3.6 billion U.S.), up 10% on a nominal basis and 3% on a currency-adjusted basis from the 2.64 billion euros ($3.49 billion U.S.) recorded in the fourth quarter of 2010.
Growth in the midsingle digits in Philips' Customer Services, Home Healthcare Solutions, and Patient Care & Clinical Informatics groups were tempered by flat sales growth in Imaging Systems, Philips said. Regionally, comparable sales in North America climbed 6%; sales in growth geographies increased 5%, while mature geographies produced a 2% sales gain.
However, the division's earnings before interest, taxes, and amortization (EBITA) were 409 million euros ($540.8 million U.S.), down from 522 million euros ($690.2 million U.S.) in the fourth quarter last year. Philips pointed to weakness in the European market, which led to postponed deliveries and affected margin improvement plans for its Imaging Systems unit. EBITA was also affected by investments in innovation and sales channels to drive growth, as well as one-time charges, Philips said.
In other results, equipment order growth in Imaging Systems contributed to 3% growth in order intake during the fourth quarter. Order growth was flat in Philips' Patient Care & Clinical Informatics group.
On a geographical basis, orders in mature markets decreased 3% in the fourth quarter, with European orders down 14% and North American orders up 4%. Orders in growth geographies climbed 17%.
