By Alessandro Parodi (Reuters) -Philips forecast a mid-single-digit decline in first-quarter comparable sales on Wednesday partly due to weak China spending, after the Dutch healthcare technology company missed expectations for the final three months of last year. Shares of the group, which sells products ranging from toothbrushes to medical imaging systems, fell as much as […]
Health
Philips sees lower comparable sales in first quarter on weak China spending
Audio By Carbonatix
By Alessandro Parodi
(Reuters) -Philips forecast a mid-single-digit decline in first-quarter comparable sales on Wednesday partly due to weak China spending, after the Dutch healthcare technology company missed expectations for the final three months of last year.
Shares of the group, which sells products ranging from toothbrushes to medical imaging systems, fell as much as 13% in early trade.
Philips expects a mid- to high-single-digit decline in 2025 China sales, and an impact from recently announced tariffs by Beijing and the United States.
Consumer spending is much lower than before in the Chinese market, while regulations and anti-corruption policies in the country will impact healthcare procurement processes, CEO Roy Jakobs told journalists.
However, Bank of America said in a note the estimates might be “very conservative” with potential upside.
Jakobs confirmed Philips’ January estimates that China would account for about 10% of group revenue for the foreseeable future, down from more than 13% earlier in the decade.
As fears of a major global trade war rise, Philips is in talks with Beijing, Washington and European governments to protect healthcare as a “very essential need”, Jakobs told journalists.
Globally, Philips forecast a 1% to 3% growth in its comparable sales in 2025, compared with a 1% rise in 2024.
In the October-December period, the group’s comparable sales rose a mere 1%, weighed down by a double-digit decline in China.
That was slower than a 1.7% rise expected in a company-provided poll and below the 6% growth recorded in the same quarter of 2023.
Total sales came in at 5.04 billion euros ($5.27 billion) for the quarter, lower than the 5.07 billion euros analysts had forecast.
Adjusted earnings before interest, tax, and amortisation (EBITA) came in at 679 million euros, slightly below the 683 million euros in the company-provided consensus.
Philips proposed an annual dividend of 0.85 euros per share, same as the dividend it paid out for 2023.
($1 = 0.9562 euros)
(Reporting by Alessandro Parodi in Gdansk; Editing by Subhranshu Sahu)