Healthcare was a bright spot in an otherwise gloomy fourth-quarter picture for Dutch industrial conglomerate Royal Philips Electronics, which announced that it is cutting 6,000 jobs due to weakness in the global economy.
Overall, Philips posted its first quarterly loss in five years, said it was halting its stock buyback program, and announced it was cutting 6,000 jobs across the company.
Growth in its imaging systems, customer services, and healthcare informatics units boosted quarterly results for the company's Philips Healthcare division of Andover, MA, with sales rising 9% on a comparable basis, excluding the impact of currency changes, recent acquisitions, and other factors.
For the period (end-December 31), the division had comparable sales of 2.569 million euros ($3.34 billion U.S.), compared with sales of 1.997 million euros ($2.6 billion U.S.) in the fourth quarter of 2007. When factors such as sales from the division's Respironics acquisition were included, the division reported sales growth of 29%.
Philips had earnings before interest, taxes, and amortization (EBITA) of 366 million euros ($475.6 million U.S.), up from 354 million euros ($460 million U.S.) in 2007. The 2008 numbers include 89 million euros ($115.7 million) in acquisition and restructuring charges in 2008.
In quarterly highlights, Philips said that growth in its imaging systems unit was driven by all modalities, including sales of 30 iCT 256-slice systems in the quarter. Equipment order intake dipped 2% on a currency-comparable basis, due primarily to lower orders from its North American imaging systems operations. CT and MR orders were notably down, Philips said.
The company said that it expects the healthcare market to weaken in the first quarter of 2009, especially in the U.S.
The 6,000 job cuts included a job reduction program announced in November in which Philips said it would reduced its global healthcare workforce of 35,000 employees by 5%, for a total of 1,750 job cuts.
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