Philips says IPO likely for legacy lighting biz;l healthcare profits

Royal Philips (NYSE:PHG) said today that it’s likely to float an initial public offering for its legacy lighting business, which would create the world’s largest stand-alone light maker.

Philips, which launched in 1891, is partly through a plan to pare its businesses to better focus on its merged healthcare and consumer businesses.

CEO Frans van Houten acknowledged that the company could still switch to a trade sale if uncertainty around a possible British exit from the European Union upset markets, but that seemed unlikely.

“With equity markets’ sentiment improving compared to the 1st couple of months of the year, an IPO increasingly appears a more likely outcome,” the company said, adding a final decision would be made “shortly.”

PHG shares closed down -4.2% at $27.09 apiece today, perhaps due to investors expressing their preference for an exit to a private equity firm or a trade buyer in China.

Profits slide during 1st quarter under new healthcare divisions

Philips said 1st-quarter profits were down -63.0% to $32.83 million (€37.0 million), or 3¢ (€.03) per share, on sales of $4.90 billion (€5.52 billion). The healthcare businesses, which account for about 2/3 of total sales, grew sales by a collective 6.7%, to $3.40 billion (€3.83 billion). Lighting sales were down -1.8% to $1.50 billion (€1.69 billion).

Sales for the new personal healthcare business were up 5.8% to $1.43 billion (€1.61 billion); diagnosis & treatment sales rose 8.8% to $1.26 billion (€1.42 billion), while connected care & health informatics revenues jumped 11.0% to 615.8 million (€694.0 million). Other healthcare sales of $91.4 million (€103.0 million) were down -23.7%.

($1 = €0.8873)

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