Latest news with #Jakobs
Yahoo
07-05-2025
- Business
- Yahoo
Philips cuts earnings forecast after calculating $340M tariff hit
This story was originally published on MedTech Dive. To receive daily news and insights, subscribe to our free daily MedTech Dive newsletter. By the numbers Q1 revenue: 4.1 billion euros 2% decrease year-over-year Q1 net income: 72 million euros Compared to net loss of 998 million euros in Q1 2024 Philips has predicted tariffs will have a net impact of up to 300 million euros ($340 million) this year despite the company taking 'substantial' steps to mitigate the effects. The prediction, which Philips made in its first-quarter earnings Tuesday, led the company to lower its forecast full-year margin range by one percentage point. Philips is assuming bilateral U.S.-China tariffs stay in place and paused U.S. tariffs on other countries resume. The forecast excludes the potential wider economic impacts of tariffs and trade tensions. Tariffs between the U.S. and China account for most of the impact, Philips CFO Charlotte Hanneman said on an earnings call with investors. Philips expects that tariffs will have a 'more pronounced effect in the second half of the year,' Hanneman said, and the diagnosis and treatment and personal health units will be more affected than the connected care business. Hanneman said Philips is trying to limit the impact of tariffs by 'optimizing network flexibility, effective inventory management, pursuing exceptions [and] selective pricing.' CEO Roy Jakobs shared more details about how Philips is changing its manufacturing network to soften the blow, explaining that the current situation requires the company to accelerate the localization of production in the U.S. 'We are leveraging our current footprint to expand. That's the fastest way we can mitigate, given the approval cycles and the regulatory processes, because you have then the quality management systems in place that you can use,' Jakobs said. 'We have a strong footprint that we will leverage for the max to kind of ensure we can do it with speed and also with lower cost and lower capital requirements.' The program will build on existing efforts to localize production. Manufacturing in China is already 90% localized, Jakobs said, and Philips is pursuing Europe for Europe and Americas for America policies. The efforts are intended to dull the impact of tariffs in 2025 and beyond, with Hanneman predicting that the benefits of the actions will increase over time. China challenges continue Philips provided an update on its performance in China, which has dragged on the company's results in recent quarters. Double-digit drops in sales across all Philips' businesses in China caused comparable revenues to fall 2% in the quarter. Philips also reported a drop in orders in China.
Japan Today
06-05-2025
- Business
- Japan Today
Philips reports profit but China, tariffs weigh
Dutch medical device maker Philips reported a net profit for the first time in three quarters Tuesday despite weak sales in China but warned of "intensified" uncertainties due to tariffs. Net profits came in at 72 million euros ($82 million), compared to a net loss of 998 million euros in the same quarter last year and 333 million euros in the fourth quarter of 2024. "It's an encouraging start to the year," the firm's chief executive Roy Jakobs told reporters. Jakobs predicted that the second half of the year would be stronger for the firm than the first half. "In an uncertain macro environment that has intensified due to the potential impact of tariffs, we are focused on what we can control," he added. The company estimated a hit of between 250-300 million euros from tariffs over the year. Philips maintained its forecast for between one and three percent growth in sales for 2025, but slightly cut its projection for earnings before special items (EBITA). The firm pointed to a two-percent growth in orders globally, with China again proving a drag. Without China, the order growth would have been four percent, Philips said. However, global sales were down two percent compared to the same quarter last year due to a "double-digit decline" in China, the firm said. Philips has previous warned that a slowing Chinese economy was hurting consumer demand for products and the government's anti-corruption drive was hitting procurement. Once famous for making lightbulbs and televisions among other products, Amsterdam-based Philips in recent years has sold off subsidiaries to focus on medical care technology. Since 2021, the company has been battling a series of crises over its DreamStation machines for sleep apnoea, a disorder in which breathing stops and starts during sleep. Millions of devices were recalled over concerns that users were at risk of inhaling pieces of noise-cancelling foams and fears it could potentially cause cancer. In April 2024, it announced it had reached a $1.1 billion deal to settle US lawsuits over the faulty machines. © 2025 AFP
Yahoo
06-05-2025
- Business
- Yahoo
Philips cuts profit, sees $300M impact from tariffs
Philips (PHG) stock slid more than 4% in trading Tuesday despite a moderate first quarter earnings report. The company reported $4.7 billion in revenue, in line with Wall Street estimates. The company beat on adjusted earnings per share, reporting 28 cents per share versus consensus of 25 cents per share. Philips affirmed its 2025 sales guidance but cut profit in anticipation of a $280 million to $340 million impact from tariffs, CEO Roy Jakobs said Tuesday. The new estimated profit margin for the year is between 10.8% and 11.3%, compared to previous guidance of between 11.8% and 12.3%. "The announced tariffs have an impact. Not on sales, so we kept the sales guidance untouched, because of the strong demand that we have. But we do reflect potential impact of the tariffs into our profit and cash guidance," Jakobs told Yahoo Finance on Tuesday. Read more: The latest news and updates on Trump's tariffs The Dutch medical device maker is the latest to estimate tariff impacts, as medtech companies were not exempted from Trump's tariffs starting on April 2. The industry has been lobbying for a carve-out but has not been successful. And with "reciprocal" tariffs between the US and China in place, Philips, for which China is an important market, is being heavily impacted. The US currently has a 145% tariff on Chinese imports, and China has levied a 125% tariff on US goods. NYSE - Nasdaq Real Time Price • USD (PHG) View Quote Details 24.50 - (-4.44%) As of 12:43:30 PM EDT. Market Open. Advanced Chart Jakobs said he is "talking with all governments," including officials from the US and China, to reduce or eliminate the tariffs and their impact on business. But he does not want to preempt any moves, which is why the company guided down on profits for the year. It's also why the company is doubling down on its strategy to have supply chains localized for each of the markets — the US, Europe, and Asia — that it serves. "The medical technology supply chain is a complex one. It doesn't mean you can source all components from one country. Therefore, what we have been doing is bringing more of the components, more of the manufacturing, into these regions," Jakobs said. Medical equipment from United Imaging Healthcare Technology is displayed during the 2023 World Health Expo on April 7, 2023, in Wuhan, Hubei Province, China. Exhibitors included General Electric, Philips, and Siemens. (Getty Images) · Getty Images via Getty Images The company already has 46 sites in the US and recently announced a new cardiac device manufacturing site in Minnesota. Philips is "taking very stringent cost measures to also make sure that we don't have to offset this with prices increases to our customers," Jakobs said. He said the company's moves to regionalize its supply chain began a few years ago, during the pandemic, when it became evident there was a need to build resiliency against the types of supply chain interruptions in the early days of the pandemic.
RTÉ News
06-05-2025
- Business
- RTÉ News
Philips cuts annual profit estimates as trade war clouds outlook
Dutch healthcare technology company Philips has today cut its profit margin forecast for 2025, citing a net impact from tariffs of between €250-300m despite "substantial tariff mitigations". The US is Philips' largest market, accounting for about 40% of its projected 2024 sales and one-third of its tax contributions. The company imports various products from China, including Respironics breathing masks, electrical shavers, toothbrushes, and other devices, while sourcing medical equipment from Europe. Philips plans to reduce the potential impact of trade tensions, mostly from US tariffs on Chinese imports and China's counter tariffs, with actions including pricing and supply chain adjustments, CEO Roy Jakobs said on a post-earnings call. He added that the company would accelerate production at some of its 46 US locations and further localise its Chinese operations, which supply 90% of its market in the country. While the rates and timing of US tariffs on the health sector remain unclear, analysts anticipate that companies will likely have to absorb any near-term costs if these tariffs are imposed. Washington has launched an investigation into the pharmaceutical industry, laying the groundwork for possible levies. "We are in contact with governments in China, in the EU, in the Netherlands, and also in the US", Jakobs said. "We also talk about indeed excluding medical technology from the current tariff regimes." Philips plans to leverage relief measures including the so-called Nairobi Protocol, which exempts from tariffs some devices used to treat chronic conditions. Other cost reduction measures do not exclude job cuts, "but it's far beyond people alone," Jakobs said. Philips, which makes consumer electronics, appliances and medical equipment, paid €38m in US customs duties last year, according to a February report. Including the impact of tariffs, Philips now expects its adjusted earnings before interest, tax and amortisation (EBITA) margin to come in a range between 10.8% and 11.3%, down from previous forecast of 11.8%-12.3%. "This appears to factor in a resumption of all tariffs at currently announced rates," JP Morgan said in a note. "There is scope for upside on any lowering of the rates." The Dutch company reaffirmed its forecast for comparable sales growth of between 1% and 3% this year, after reporting a smaller-than-expected sales decline in the quarter. A strong performance in North America helped offset a decline in China. Sales for the quarter ended March 31 were €4.10 billion euros, down 2% year-on-year in comparable terms, but exceeding analysts' average forecast of €4.02 billion, according to a company-provided consensus. The company is a main competitor of GE HealthCare and Siemens Healthineers. GE HealthCare also warned that tariffs could impact its full-year profits, expecting losses of around $500m. Siemens Healthineers reports its first-quarter results this week.
Free Malaysia Today
06-05-2025
- Business
- Free Malaysia Today
Philips turns in a profit but China, tariffs weigh
In April 2024, Philips announced that it had reached a US$1.1 billion deal to settle US lawsuits over the faulty machines. (EPA Images pic) THE HAGUE : Dutch medical device maker Philips reported a net profit for the first time in three quarters today despite weak sales in China but warned of 'intensified' uncertainties due to tariffs. Net profits came in at €72 million (US$82 million), compared to a net loss of €998 million in the same quarter last year and €333 million in the fourth quarter of 2024. 'It's an encouraging start to the year,' the firm's chief executive Roy Jakobs told reporters. Jakobs predicted that the second half of the year would be stronger for the firm than the first half. 'In an uncertain macro environment that has intensified due to the potential impact of tariffs, we are focused on what we can control,' he added. The company estimated a hit of between €250 million and €300 million from tariffs over the year. Philips maintained its forecast for between 1% and 3% growth in sales for 2025, but slightly cut its projection for earnings before special items (EBITA). The firm pointed to a 2% growth in orders globally, with China again proving a drag. 'Without China, the order growth would have been 4%,' Philips said. 'However, global sales were down 2% compared to the same quarter last year due to a 'double-digit decline' in China,' the firm said. Philips has previous warned that a slowing Chinese economy was hurting consumer demand for products and the government's anti-corruption drive was hitting procurement. Once famous for making lightbulbs and televisions among other products, Amsterdam-based Philips in recent years has sold off subsidiaries to focus on medical care technology. Since 2021, the company has been battling a series of crises over its DreamStation machines for sleep apnoea, a disorder in which breathing stops and starts during sleep. Millions of devices were recalled over concerns that users were at risk of inhaling pieces of noise-cancelling foams and fears it could potentially cause cancer. In April 2024, it announced it had reached a US$1.1 billion deal to settle US lawsuits over the faulty machines.
