Philips Books EUR250 Million Provision Against Faulty Product; 1Q Net Profit Was Up Slightly

By Ian Walker

Koninklijke Philips NV said Monday that it has booked a 250 million euro ($302.5 million) provision in its accounts after finding a quality issue with a component used in some sleep and respiratory-care products, as it booked a slight rise in first-quarter net profit.

Despite the provision, the Dutch health-technology company raised its forecast for the year. It now expects to deliver low-to-mid-single-digit comparable sales growth for 2021, up from low-single-digit growth previously indicated. The company still expects to report adjusted earnings before interest, taxes and amortization margin improvement of 60-80 basis points.

Philips made a net profit attributable to shareholders of EUR39 million for the quarter ended March 31 compared with EUR38 million for the same period last year.

Quarterly sales rose to EUR3.83 billion from EUR3.69 billion, beating analysts' expectations for EUR3.72 billion taken from the company's website. On a comparable basis, sales grew 9%, ahead of company-provided consensus estimates of 6.3%.

Adjusted Ebita--a metric that strips out exceptional and other one-off items--was EUR362 million compared with EUR208 million and a company-compiled consensus of EUR326 million, Philips said.

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(END) Dow Jones Newswires

April 26, 2021 01:36 ET (05:36 GMT)

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