Philips Electronics’ share price down, the Chief of its healthcare unit to step down after posting “disappointing” profit

Philips Electronics made an official statement, announcing that the Chief of its health-care unit Ms. Deborah DiSanzo has stepped down after spending two years as head of the medicine dispenser and scanner division. The decision of Ms. DiSanzo to depart from Philips came after the healthcare division of the Dutch company posted “disappointing” results over the second quarter of the current fiscal year.

The company also revealed that it does not plan to appoint anyone as a replacement after the departure of Ms. DiSanzo, so the healthcare units managers will now report directly to Mr. Frans van Houten, who is the Chief Executive Officer of Philips Electronics.

Currently, the health-care division of the company is its largest business and represents more than 40% of the total revenue of Philips. This is the reason why the company has become more focused on the unit and is trying to oppose to narrowing budgets among most hospitals located in Europe, as well as to fight back to the consolidation of the medical market on the territory of the U.S. Unfortunately, the earnings of the unit before interest, taxes and amortisation of the healtcare business failed to reach the initial analysts projections, while the quarterly profit at the group level met forecasts.

“What you see is that the miss in healthcare is compensated by other divisions, so overall it’s in line with what the market expects,” said Robin van den Broek, an analyst at ING in Amsterdam, cited by Bloomberg. He also added, cited by the same media: “What’s more important is that Philips said the results in the second half will be better than last year, as there was some market uncertainty about that.”

According to the statement of Philips Electronics, its overall second-quarter earnings before interest, taxes and amortisation amounted to 300 million euros (543.7 million dollars). This result, however, is lower than the 603-million-euro earnings posted over the same period a year ago.

Philips Electronics was 0.89% down to trade at 23.50 euros per share by 7:16 GMT, marking a one-year change of +6.94%. According to the information published on the Financial Times, the 25 analysts offering 12-month price targets for Philips Electronics have a median target of 26.00, with a high estimate of 32.00 and a low estimate of 23.00. The median estimate represents a 10.97% increase from the last price of 23.43.