Philips Lighting misses on Q4, sees growth in 2017

Chinese demand for the latest diagnostic equipment and image-guided therapy devices drove a double-digit increase in orders in the the second quarter, the Amsterdam-based company said yesterday.

AMSTERDAM: Philips Lighting, the world's largest lighting maker, reported worse-than-expected fourth quarter earnings on Monday, but pledged to increase margins and sales in 2017.

Earnings before interest, taxes, appreciation and amortisation (EBITA) for the quarter was 188 million euros (US$202 million), up from 159 million euros in the same period a year ago.

Analysts polled for Reuters had put adjusted EBITA at 193 million euros.

Philips Lighting, spun out from its parent Philips NV in May, is racing to grow its LED and other businesses, as its traditional lamps business is in terminal decline.

In the fourth quarter, group sales fell 5.4% to 1.93 billion euros, with LED sales were up 9.9 to 440 million euros - but lamp sales were down 20% at 575 million euros.

Both businesses improved margins as the company cut purchasing and procurement costs. Adjusted group margin improved to 9.7% from 7.8%.

The company expects to improve margins by up to another 1% this year, it said in a statement, adding that it expects sales to return to net growth as LED and other businesses, such as its professional lighting offerings, begin to outweigh the declines at lamps.

CEO Eric Rondolat told reporters that he expects sales growth to turn positive in the second part of the year. - AFP