Cost Savings Lead To Higher Profits For Philips

Philips reported second-quarter results that exceeded analysts' expectations thanks to cost savings, partly from job cuts, and flagged a significant insurance payout linked to liability claims, sending its shares more than 10% higher, Stephanie Hamel and Charlotte Bawol reported for Reuters.

Philips' EBITA rose 9.3% to 495 million euros ($537.4 million) in the quarter. I Photo: Raysonho @ Open Grid Scheduler / Scalable Grid Engine Wikimedia Commons

The Dutch medical device maker's adjusted earnings before interest, tax, and amortization (EBITA) rose 9.3% to 495 million euros ($537.4 million) in the quarter, beating the 433 million euros expected by analysts polled by the company.

Since late 2022, Philips has announced plans to slash up to 10,000 jobs in an effort to restore profitability and improve product safety.

"We announced that we would reduce 10,000 roles. We completed 8,000 in the first year, 2023. This year, we have reduced 1,000 roles," said CEO Roy Jakobs during a press call.

"You see the benefits coming back in the quarter." The Amsterdam-based group said it saved 195 million euros between April and June through these productivity improvements.