Currency fluctuations and divestments conspired to drive down second-quarter revenues at Philips Medical Systems, but the division’s profit jumped thanks to higher profit margins, cost reductions, and an increase in sales from comparable business units.
For the period, the Dutch vendor’s medical systems business posted revenues of 1.446 billion euros ($1.623 billion), down 18% compared with $1.972 billion in the second quarter of 2002. The company said that currency changes had a negative 18% impact while lower revenue due to divestments had an 8% downward effect.
Sales from comparable businesses increased 8%, with cardiac and patient monitoring systems, customer service, and medical information technology contributing the greatest gains. Sales growth in particular was strong among European and Asia-Pacific regions.
The division posted an operating profit of $171.7 million, compared with an operating profit of $60.6 million in the second quarter of 2003. Income as a percent of sales increased to 10.6% in the most recent period, compared to 3.1% in the same period a year ago. In addition, the company incurred a one-time charge of $7.5 million related to the restructuring of its North American operations.
By AuntMinnie.com staff writersJuly 17, 2003
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