Amsterdam - Medical equipment maker
Philips on Tuesday disclosed a conflict with the US government over defibrillators it sold in 2015 and before, along
with fourth-quarter earnings in which it missed analysts'
estimates.
Philips repeated its medium-term financial targets of 4
percent to 6 percent average comparable sales growth and a 1
percent improvement in adjusted EBITA margin per year despite
the defibrillator matter, which it said was civil, not criminal,
in nature and would "have a significant impact" on that
business.
"We are currently in discussions on a civil matter with the
Department of Justice representing the US Food and Drug
Administration, arising from past inspections in and before
2015, primarily on our external defibrillator business," CEO
Frans van Houten said in a statement. "While the discussions
have not yet concluded, we anticipate a meaningful impact on the
operations of this business."
Philips was forced to close a plant in Cleveland in 2014
that made high-end medical scanners due to US government
concerns over quality control in its supply chain. The company
is still recovering from that incident, which badly dented
earnings, with production ramping to full capacity in the course
of 2015 and margins at its Diagnosis division continuing to
recover.
Van Houten said on Tuesday the company was committed to
quality and had "over the last years made investments to enable
significant progress in this area."
The company reported fourth-quarter adjusted earnings before
interest, taxes and amortisation (EBITA) of 1 billion euros
($1.08 billion) compared with 842 million euros in the same
period a year earlier. Sales rose 3 percent to 7.24 billion
euros.
Analysts polled for Reuters forecast the EBITA figure at
1.04 billion euros and sales at 7.28 billion euros.