MW Philips issues its second straight profit warning on China. The stock is hammered, again.

By Steve Goldstein

Philips shares fell sharply on Wednesday as the Dutch healthcare equipment maker again warned on China, triggering a big drop in its stock price.

Philips shares (NL:PHIA) $(PHG)$ slumped 11% as it forecast 1% to 3% comparable sales growth for 2025, with China sales falling in the mid-to-high single digits. According to analysts at Jefferies, consensus had expected organic sales growth of 3.4%.

The last time it reported results, on Oct. 28, it also delivered a China-themed warning and its stock dove 17%. The two reports before that, however, led to double-digit stock price gains, according to FactSet.

The latest results, for the fourth quarter, didn't come as big surprise. It swung to a loss of EUR333 million, or 36 eurocents a share, due to a derecognition of deferred tax assets in the U.S. as well as higher income.

The maker of products ranging from CT scanners to baby monitors said adjusted income from continuing operations improved to 51 cents a share from 40 cents a share on stable sales of EUR5.04 billion. According to FactSet, analysts expected earnings of 53 cents on sales of EUR5 billion.

Philips has been dogged both by soft China demand as well as a recall of its respiratory devices. In December, it finalized personal-injury settlements worth $1.1 billion that it will pay out this year.

-Steve Goldstein

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February 19, 2025 06:30 ET (11:30 GMT)

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