Philips’ focus on health care products and away from consumer electronics seems to be paying off.
After a strategic overhaul, the healthcare division is now its most profitable after and accounts for around forty percent of its business.
And in the latest quarter it saw orders in that part of the business rise more than expected – up seven percent – thanks to new ultrasound and scanning products and strong demand from China.
But Chief Executive Frans van Houten remains cautious: “We can be a bit more optimistic, but it is certainly not safe waters,” he said in an analysts’ conference call.
He added “I continue to be concerned about economic uncertainties in the world. We see that a transformation of health care in the United States is making hospital CEO’s cautious to make capital investments. In markets like Japan we see that the decline of the Japanese yen is affecting the world.”
The better than expected results follow job cuts and the sale of its television and audio and video operations where it was struggling to compete with lower-cost Asian manufacturers.
The focus now is on more profitable home appliances and lighting as well as healthcare.