Philips raises full-year outlook as profits jump despite drop in orders

Dutch health technology company, Philips, has reported an increase in third-quarter profit and sales, despite a drop in orders. 

On Monday 23 October, the company raised its full-year outlook after beating analysts’ expectations for core profit and comparable sales.

Philips reported that its core profit more than doubled to €457 million euros ($483.3 million), in Q3 of 2023.

Comparable sales were also up 11 per cent at €4.5 billion as demand for medical scanners, patient monitoring equipment and personal health devices increased.

However, new orders were down nine per cent from last year, following a drop in demand from China after the pre-pandemic boom, as well as ongoing supply chain problems.

In an interview with Reuters, CEO Roy Jakobs, 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 now expects six to seven per cent comparable sales growth over 2023, with a profit margin (adjusted EBITA) of 10-11 per cent.

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 amortisation would rise to €389 million euros from €209 million euros a year before, on eight per cent comparable sales growth.