Wednesday 06 July 2022

Tricky start to the year for Philips, as it posts €151m first-quarter loss

Medical technology giant Philips lost 10% in early trading on Monday after announcing a first quarter loss of €151 million, compared with a net profit of €40 million a year ago.

There were, however, some positive signs. Like-for-like sales fell by less than forecast, while orders rose 5%, the company said.

Philips said it expected sales and profitability to recover in the second half of the year, but warned that new coronavirus outbreaks in China, the war in Ukraine and continued supply chain challenges could put this outlook at risk.

The company had already warned about a rocky start to the year because of a shortage of parts and problems with its sleep apnea monitors.

Last year Philips started the process of recalling some five million sleep apnea monitors for replacements and had set aside €725 million to fund the process. This was increased by €165 million in the first quarter of 2022.

Last week it emerged that the company also had problems with one type of ventilator which, Philips said, could switch off without sounding its alarm. The ventilators are for assisted breathing and the company said it estimated the problem could lead to ‘one silent shutdown among one million uses per year’.

Philips’s share price has halved over the past year, and the company is now trading at around €25 per share.

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