Dutch Health Tech Firm Philips' Q3 Earnings Miss Expectations, Lowers Annual Forecasts On Weak Demand In China
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On Monday, Koninklijke Philips NV (NYSE:PHG) reported third-quarter adjusted EPS of 0.32 euros (or $0.35), missing the consensus of 0.35 euros.
“In the quarter, demand from hospitals and consumers in China further deteriorated, while we continue to see solid growth in other regions. We have adjusted our full-year sales outlook to reflect the continued impact from China,” said Roy Jakobs, CEO of Royal Philips.
“Within a challenging macro environment, we remain focused on successfully executing our three-year plan to fully capture growth and margin expansion opportunities,” Jakobs added.
Also Read: Philips Issues Software Fix For Some Ventilators To Fix Power Alarms Issues, Oxygen Display Errors.
The Dutch conglomerate reported sales of 4.38 billion euros ($4.74 billion), down 2% year over year and missing the consensus of 4.54 billion euros.
Group comparable sales were flat on the back of 11% growth in the quarter and a deterioration in demand in China.
The company delivered growth in all other regions and from increased royalty income. China remains a fundamentally attractive growth market for Philips in the long term, with market conditions expected to remain uncertain.
Comparable order intake in the quarter declined 2% due to China, with solid order intake growth in Diagnosis & Treatment, particularly in the U.S. Year-to-date comparable order intake grew 1%, including China.
Diagnosis & Treatment comparable sales decreased 1%, on the back of 14% growth in the third quarter of 2023, with solid growth outside of China.
Connected Care comparable sales were flat, with growth in Enterprise Informatics and Sleep & Respiratory Care offset by a low-single-digit decline in Monitoring on the back of high-teens growth the prior year.
Personal Health comparable sales decreased 5% due to a double-digit decline in China, more than offsetting a robust performance elsewhere.
Guidance: The Dutch health technology expects full-year 2024 comparable sales growth of 0.5%-1.5% versus the prior guidance of 3%-5%.
Philips expects comparable sales growth outside of China to remain within the 3-5% range.
The adjusted EBITA margin is expected to be around 11.5%, at the upper end of the range, and free cashflow around EUR 0.9 billion, at the lower end of the range.
Price Action: PHG stock is down 17.1% at $26.25 during the premarket session at last check Monday.
Photo by Mats Wiklund via Shutterstock
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