Philips PHG recently announced a five-year partnership agreement worth $16 million with South Carolina based acute health provider Regional Medical Centre (RMC).
The deal will allow RMC to deliver innovative diagnostic imaging solutions for the patients of rural Orangeburg, Calhoun, Bamberg and Barnwell counties.
Notably, RMC will have access to the latest diagnostic imaging solutions like Philips’ helium-free Ingenia Ambition X system, which improves first-time diagnosis and enables faster examination.
The health provider will also get access to industry-leading, minimally invasive solutions like the Philips Azurion image-guided therapy platform, which offers a unique operating system to optimize integration and an intuitive user interface that gives better control to clinicians.
Philips’ Image-Guided Therapy and Diagnostic Imaging segment witnessed high single-digit growth in third quarter 2019, driven by increased adoption of advanced technologies in medical imaging. Per Mordor Intelligence, the diagnostic imaging market is expected to witness CAGR of 6.1% from 2019 to 2024.
Koninklijke Philips N.V. Price and Consensus
Koninklijke Philips N.V. price-consensus-chart | Koninklijke Philips N.V. Quote
LSPs to Aid Philips Expand Global Footprint
This partnership is in line with Philips’ focus on bringing value-based solutions to the market and developing long-term strategic partnerships (LSPs) with key customers.
Such partnerships are common among hospitals and health care providers as these help better manage the cost and complexity of their technology investments, while expanding access to advanced medical care.
Most recently, Philips partnered with Inspira Health to transform patient care for the residents of New Jersey and drive innovation in diagnostic imaging solutions.
Philips also entered into a long-term partnership with Klinikum Stuttgart hospital to facilitate the replacement and procurement of state-of-the-art medical technology, including diagnostic imaging and intelligent informatics solutions, at their hospitals.
Other notable partnerships include the Saudi Ministry of Health, Sweden-based Karolinska University Hospital, Westchester Medical Center Health Network and the University Hospital of Zürich among others.
These partnerships have helped Philips gain a solid foothold in both local and International markets and expand its share in the health-tech sector, which per Mordor intelligence, is expected to witness CAGR of 12.8% by 2024.
Notably, the company generated revenues of €4.7 billion in third quarter 2019, reflecting comparable sales growth of 6%. Developed markets (Western Europe, North America and other mature markets) delivered 5% comparable growth and growth markets recorded 9% comparable growth, driven by double-digit growth in India, China, Russia and Central Asia.
Zacks Rank & Stocks to Consider
Philips currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Applied Materials AMAT, Cirrus Logic CRUS and Fortinet FTNT. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Applied Materials, Cirrus Logic and Fortinet is currently pegged at 8.2%, 15% and 14%, respectively.
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