Philips Says CT Scanner Production Delay Will Hit Full-Year Earnings

By Ed Ballard 

Royal Philips NV's full-year earnings will take a EUR225 million ($340 million) hit from a delay in the production of CT scanners, the Dutch company said Tuesday.

The electronics supplier said it has resumed shipping its Brilliance iCT product from a facility in Cleveland, Ohio, following external certification of its quality management system, but the process took longer than expected. Production at the facility was suspended last March after the U.S. Food and Drug Administration raised concerns about its manufacturing controls.

The delay will reduce 2014 earnings before interest, tax and amortization, or Ebita, by around EUR225 million instead of the previously-estimated EUR180 million, it said.

"Although these delays have impacted our broader healthcare performance, we are very pleased to now build further momentum in delivering strong imaging innovations to our customers," said Chief Executive Officer Frans van Houten.

Ebita will total EUR255 million in the fourth quarter, reflecting legal charges, foreign exchange impacts and "softness in certain markets," as well as the Cleveland production issue, Philips said.

Write to Ed Ballard at [e-mail]

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