Koninklijke Philips N.V. PHG reported third-quarter 2024 earnings of €0.19 per share, witnessing a significant rise from the year-ago quarter’s reported figure of €0.09 per share.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company’s sales decreased 2.1% on a year-over-year basis to €4.4 billion.

Comparable sales remained steady, following double-digit growth in the third quarter of 2024. A decline in comparable sales in China was balanced by growth in other regions and an increase in royalty income.

Koninklijke Philips N.V. Price, Consensus and EPS Surprise

Koninklijke Philips N.V. price-consensus-eps-surprise-chart | Koninklijke Philips N.V. Quote

Further, Philips’ comparable order intake declined 2% year over year in the reported quarter, primarily due to a decline in China. 

Sales declined 3% on a comparable basis in growth geographies. Sales in mature geographies were up 1% year over year on a comparable basis.

PHG’s Segmental Update

Diagnosis & Treatment revenues declined 2.4% from the year-ago quarter to €2.15 billion. Comparable sales declined 1% year over year, primarily due to weakening performance in China. Growth in Image Guided Therapy was offset by a decrease in precision diagnosis.

Although overall comparable sales decreased slightly, there was solid growth outside of China, particularly in image-guided therapy and precision diagnosis.

Connected Care revenues decreased 1.7% year over year to €1.21 billion. Comparable sales remained flat, as growth in Enterprise Informatics and Sleep & Respiratory Care was offset by a slight decline in Monitoring following high-teens growth in the third quarter of 2024.

Personal Health revenues fell 7% year over year to €835 million. Comparable sales declined 5% year over year, driven by a double-digit decline in China that offset growth in other regions. 

Other segment sales amounted to €181 million, up 29.3% on a year-over-year basis. 

Philips continued to advance its portfolio by launching new products, such as the AI-powered connected baby monitor, and securing FDA approvals for new medical devices. These product launches enhance PHG’s market position and drive demand in other regions.

PHG’s Operating Details

Gross margin expanded 260 basis points (bps) on a year-over-year basis to 45.8% in the reported quarter.

General & administrative expenses, as a percentage of sales, were 3.4%, which remained flat on a year-over-year basis. Moreover, selling expenses contracted 40 bps to 24.6%. Research & development expenses dipped 100 bps to 9.9%.

Restructuring, acquisition-related and other items amounted to a net gain of €113 million compared with €162 million a year ago.

Operating model productivity, procurement and other productivity programs delivered savings of €54 million, €58 million and €76 million, respectively. This resulted in total savings of €188 million.

Phillips’ adjusted EBITA — the company’s preferred measure of operational performance — rose 13.2% year over year to €516 million. EBITA margin expanded 160 bps on a year-over-year basis to 11.8% in the reported quarter.

Diagnosis & Treatment’s adjusted EBITA margin contracted 10 bps on a year-over-year basis to 12.6%.

Connected Care’s adjusted EBITA margin was 7.3% in the reported quarter, which expanded 370 bps on a year-over-year basis.

Personal Health’s adjusted EBITA margin contracted 220 bps on a year-over-year basis to 16.5%.