Philips Stock Up On Higher Q4 Results, Dividend Proposal, Positive Outlook

Shares of Philips Electronics NV were gaining around 3 percent in Amsterdam trading after the Dutch consumer electronics giant reported Monday higher results in its fourth quarter. The company also proposed dividend, and said it sees growth in fiscal 2021 comparable sales and adjusted margin.

Frans van Houten, CEO, said, “Looking ahead, we continue to see uncertainty related to the impact of COVID-19 across the world. For 2021, Philips plans to deliver low-single-digit comparable sales growth, driven by solid growth in Diagnosis & Treatment and Personal Health, partly offset by lower Connected Care sales, and an Adjusted EBITA margin improvement of 60-80 basis points.”

For the full year 2020, the company recorded 3 percent comparable sales growth and an adjusted EBITA margin of 13.2 percent.

Further, the company proposed a dividend of 0.85 euro per share, in cash or shares at the option of the shareholder. The dividend record date will be May 11, and the shareholders can choose between cash and shares between May 12 and June 4. If no choice is made during this election period, the dividend will be paid in cash.

Regarding its agreements to acquire BioTelemetry and Capsule Technologies, Philips said it targets significant revenue synergies, and these businesses will be accretive to Philips’ sales growth and Adjusted EBITA margin in 2021.

For the fourth quarter, the company’s net income increased to 607 million euros from last year’s 556 million euros. Earnings per share were 0.66 euro, up from 0.60 euro a year ago.

Income from continuing operations increased to 608 million euros from 550 million euros last year.

Adjusted earnings per share were 0.94 euro, compared to 0.83 euro last year. Adjusted EBITA margin improved 110 basis points to 19.0 percent.

The fourth-quarter sales edged up 1 percent to 6 billion euros from 5.96 billion euros last year. Comparable sales growth was 7 percent. Comparable order intake increased 7 percent.

Diagnosis & Treatment businesses’ comparable sales growth was 1 percent, driven by high-single-digit growth in Diagnostic Imaging.

Comparable sales in the Connected Care businesses increased 24 percent in the quarter, with double-digit growth in Monitoring & Analytics and Sleep & Respiratory Care. The Personal Health businesses delivered a comparable sales increase of 5 percent, with double-digit growth in Domestic Appliances and mid-single-digit growth in Personal Care.

In Amsterdam, Philips shares were trading at 46.86 euros, up 2.69 percent.

In pre-market activity on the NYSE, the shares were gaining around 2 percent.

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