Philips resumes Cleveland facility production, but hit with large drop in earnings

by Lauren Dubinsky, Senior Reporter | January 16, 2015
Molecular Imaging
Royal Philips recently announced that it has gradually resumed production of its Brilliance iCT system from its Cleveland, Ohio, facility after it temporarily suspended production in early 2014. The company stated that since it took longer to restart production than expected, the impact on 2014 earnings will be about $261 million instead of the $209 million it previously anticipated.

"We greatly appreciate the loyalty our customers have shown throughout this temporary, voluntary production suspension, and we acknowledge that this unfortunate event has caused difficulties for those of our customers who have been affected," Mario Fante, senior manager of public relations, wrote to DOTmed News in a statement.

"We have been working hard to continue to justify their trust. We remain on track to resume shipments from Cleveland, and we will honor our commitment to provide quality health care solutions to help make lives better."
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In January, the FDA inspected Philip's Cleveland facility and brought attention to "certain issues in the general area of manufacturing process controls." Philips voluntarily made the decision to temporarily halt production of certain CT and nuclear medicine products to fix the issues.

In quarter three of 2014, Philips started to ship the first products from the facility and in December it shipped the first iCT to a customer outside of the U.S. The shipments of iCT systems within the U.S. resumed this month and the company expects to begin shipping Ingenuity and other products in its portfolio throughout this year.

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