Philips Sees Sustained Growth After Profit Meets Target

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Royal Philips NV said it expects steady revenue growth in 2021, bolstered by acquisitions and a record quarterly haul of contracts to upgrade hospital equipment.

The maker of respiratory gear and body scanners increased sales 3% in 2020 and predicted another year of low-single-digit growth this year in a statement on Monday. Fourth-quarter earnings totaled 1.14 billion euros ($1.4 billion), in line with estimates.

The coronavirus pandemic is driving a long-term shift toward virtual care, boosting demand for equipment that allows health practitioners to look after patients remotely. Philips also saw a return to growth at its diagnostics division in the quarter.

“We finished the year strongly,” Chief Executive Officer Frans van Houten said in a Bloomberg Television interview. The Dutch company pulled in 25 long-term contracts with hospitals in the fourth quarter. “I don’t ever recall that,” Van Houten said.

Philips Sees Sustained Growth After Profit Meets Target

The latest wave of infections has stalled a recovery in elective procedures after a return to pre-crisis levels from September to November, according to Van Houten. Although planned surgery was down an average 30% downturn in December and January so far, that compares with the 70% plunge back around April.

This time around, hospitals are keen to keep appointments and aren’t shying away from placing orders for equipment, he said.

Shares of the Amsterdam-based company advanced 2.6% to 46.84 euros as of 10:00 a.m. local time. They are up about 7% so far this year, valuing Philips at 43 billion euros.

©2021 Bloomberg L.P.

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