Philips cuts guidance as tariffs hit bottom line
By Benjamin Chiou
Date: Tuesday 06 May 2025
(Sharecast News) - Shares in healthtech conglomerate Philips fell on Tuesday after the Dutch firm slashed its earnings outlook for 2025 due to the fallout from the US-China trade war.
While sales growth projections remain unchanged - Philips expects a 1-3% increase in comparable sales this year - the company has lowered its forecast adjusted EBITDA margin range by 100 basis points to 10.8-11.3%.
This includes an estimated net tariff impact of €250-300m, even after "substantial tariff mitigations", it said.
Philips said its new forecasts take into account the uncertain macro environment and the assumed impact of currently announced tariffs. "This includes current bilateral US-China and rest of world tariffs, the resumption of the paused US tariffs on July 9 and excludes potential wider economic impact," the company said.
The projections came alongside Philips' first-quarter results, in which comparable sales were down 2%, reflecting double-digit declines across all segments in China and a high comparison base in the Diagnosis and Treatment business. When excluding China, comparable sales rose across the board, it said.
Meanwhile, comparable order intake increased 2% on last year, as a strong performance in North America offset declines in China.
"In an uncertain macro environment that has intensified due to the potential impact of tariffs, we are focused on what we can control," said chief executive Roy Jakobs.
"We are improving our supply chain agility, taking decisive cost actions to mitigate financial impact where possible, and ensuring we can continue to serve our customers and consumers."
Shares in Koninklijke Philips were down 2.8% at €21.88 by 1457 in Amsterdam.
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