Philips raises full-year outlook as third-quarter profit jumps

Philips office building in Warsaw, Poland on July 29, 2021.

Nurphoto | Nurphoto | Getty Images

Dutch health technology company Philips on Monday raised its full-year outlook as it beat analysts’ expectations for third-quarter core profit and comparable sales.

Core profit more than doubled to 457 million euros ($483.3 million), while comparable sales were up 11% at 4.5 billion euros as demand for its medical scanners, patient monitoring equipment and personal health devices increased.

New orders, however, were down 9% from last year, as demand from China continued to cool from a pre-pandemic boom and supply chain problems persisted.

CEO Roy Jakobs in an interview with Reuters last week said Philips aimed to make more products for China locally and to buy chips from several suppliers as ways to deal with rising trade tensions.

Despite the drop in orders, Philips said it now expected 6% to 7% comparable sales growth over 2023, with a profit margin (adjusted EBITA) of 10%-11%.

Its previous outlook guided for mid-single-digit sales growth with a high single-digit profit margin.

Analysts in a company-compiled poll had predicted adjusted July-September earnings before interest, taxes and amortization would rise to 389 million euros from 209 million euros a year before, on 8% comparable sales growth.

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