Dutch health technology company Philips has today dropped its outlook for the rest of the year, as the global coronavirus outbreak took a large bite out of its first-quarter earnings while the second quarter was set to be even worse.
Philips said earnings before interest, taxes and amortisation (EBITA) dropped 33% from a year earlier in the first quarter to €244m, while comparable sales declined 2% to €4.15 billion.
Covid-19 has increased global demand for Philips' ventilators, scanners and other hospital equipment.
But that has been more than offset by a steep decline in demand for personal health products, such as toothbrushes and shavers, as lockdowns spread from China through Asia to Europe and the US - gradually increasing the impact of the pandemic throughout the first quarter.
"On that basis, we expect that all our geographies will be impacted throughout the second quarter," chief executive Frans van Houten said.
"This is expected to result in a steep revenue decline for our Personal Health businesses and a sizable high-single-digit decline for our Diagnosis & Treatment businesses," he added.
Van Houten said Philips was now aiming to return to growth in the second half of the year, which could lead to a "modest" comparable sales growth and improvement in the adjusted EBITA margin for the full year 2020.
The company had previously guided for a 4% to 6% increase in comparable sales and a 100 basis-point improvement in its profit margin this year.
