Philips facing production problems in U.S., profits more than doubled in 2016
Philips is at loggerheads with American authorities over the production of defibrillators - FDA inspections revealed a number of shortcomings, according to ANP. The company is in talks with the U.S. department of Justice, acting on behalf of the FDA, on the matter. The company's value dropped by 4 percent after this was revealed on Tuesday morning.
The Dutch technological company believes that the issue will have "meaningful consequences" for the relevant part of the company while the discussions with the American authorities are ongoing. In 2011 the FDA temporarily closed a Philips factory in Cleveland which produced medical scanners. This negatively affected the company's results for years. A Philips spokesperson said that the company does not expect "another Cleveland", as the production processes were significantly improved since.
Last year was a good year for Philips. The company made a turnover of 24.5 billion euros. Net profits more than doubled from 659 million euros in 2015 to 1.49 billion in 2016. The company is particularly pleased with the growth in its health technology branch, the new core activity of Philips. "The growth in that sector shows that our strategic choice for health technology had effect", CEO Frans van Houten said.