Thanks to strong growth in its Personal Health as well as Diagnosis and Treatment businesses, Philips reported 5% sales growth after currency adjustment and an increase in profitability in its fourth quarter.
For the period (end-December 31), Philips had 5.3 billion euros ($6.6 billion U.S.), up on a comparable basis from the 5.3 billion euros ($6.6 billion) reported in the fourth quarter of 2016. The company had net income from continuing operations of 476 million euros ($590 million), including a one-time, noncash tax charge of 72 million euros ($89.2 million). Philips had net income from continuing operations of 465 million euros ($576.2 million) in the fourth quarter of 2016.
Driven by North America and China, comparable order intake increased by 12% in the company's Diagnosis and Treatment businesses during the fourth quarter. High-single-digit growth in ultrasound and midsingle-digit growth in image-guided therapy and diagnostic imaging propelled the Diagnosis and Treatment businesses to a 6% increase in comparable sales. In addition, these businesses produced an adjusted earnings before interest, taxes, and amortization (EBITA) margin that was 90 basis points higher than in the fourth quarter of 2016, driven mainly by higher volumes, procurement savings, and other cost productivity, Philips said.
The vendor's Connected Care and Health Informatics businesses had a 2% increase in comparable sales, including high-single-digit growth in healthcare informatics and low-single-digit growth in patient care and monitoring solutions. Philips noted, though, that comparable order intake in these businesses experienced a low-single-digit decline due to the postponement of certain expected large orders until 2018. However, the Connected Care and Health Informatics businesses improved their adjusted EBITA margin by 190 basis points in the fourth quarter, thanks in part to procurement savings and other cost productivity, according to the firm.
For the year, Philips produced sales of 17.8 billion euros ($22.1 billion), up 4% on a comparable basis from the 17.4 billion euros ($21.6 billion) reported in 2016. The company had net income from continuing operations of 1.028 billion euros ($1.3 billion), including the 72 million euro ($89.2 million) one-time tax charge. In 2016, Philips had net income of 831 million euros ($1.03 billion)
In other Philips updates, the company has submitted its response to inspectional observations by the U.S. Food and Drug Administration (FDA) following an inspection of the company's Cleveland facility in the third quarter of 2017. Philips said it had a constructive meeting with the FDA in December and will continue to drive its Quality Management System improvement program and provide monthly status reports to the FDA highlighting the progress in addressing the FDA's observations.
