Royal Philips NV (PHG.US) reported better-than-expected financial results for the fourth quarter of 2025. The company's Q4 sales increased by 1% year-over-year to 5.1 billion euros, exceeding market forecasts. Comparable sales growth reached 7%, outperforming the analyst consensus estimate of 4.9%, driven by contributions across all business segments. The Diagnosis & Treatment business saw a 4% increase in comparable sales, Connected Care recorded a 7% rise, and Personal Health achieved a significant 14% growth. In terms of profitability, the adjusted EBITA for the quarter was 770 million euros, surpassing the analyst consensus of 672 million euros. The adjusted EBITA margin expanded by 160 basis points to 15.1% compared to the same period last year. This improvement was primarily attributed to sales growth, favorable product mix, and enhanced production efficiency, although part of the profit gain was offset by increased tariff costs. Net income stood at 397 million euros, a turnaround from a net loss of 333 million euros in the prior-year period. The company also highlighted that it achieved cost savings of 800 million euros in 2025, which helped counter tariff costs estimated between 150 million and 200 million euros. CEO Roy Jakobs commented, "In 2025, we delivered on our commitment to provide better healthcare for more people. While navigating a dynamic macroeconomic environment, we strengthened the company. We ended the year with strong order intake and sales performance. Despite tariff impacts, we significantly improved our margin, maintained robust cash flow, and closed the year with a solid balance sheet." Looking ahead, Royal Philips NV has revised its 2026 comparable sales growth forecast downward to a range of 3% to 4.5%, lower than the previous projection of approximately 4.5%. The company anticipates an adjusted EBITA margin between 12.5% and 13% for 2026. This cautious outlook reflects escalating U.S. tariff pressures and ongoing challenges in its performance within the Chinese market. CEO Roy Jakobs noted in December that the impact of U.S. tariffs is expected to "nearly double" in 2026, continuing to pressure margins despite ongoing cost-cutting efforts. Furthermore, the company has outlined a plan to drive profitable growth and create sustainable value, including new integrated 2030 impact goals. This strategy is built on three pillars: growth strategies for each business segment, innovation as a key growth driver, and continued disciplined execution. Royal Philips NV has also set financial targets for 2026-2028, which include achieving a mid-single-digit compound annual growth rate (CAGR) for comparable sales during this period and an adjusted EBITA margin of approximately 15% by 2028. Cumulative free cash flow is projected to be between 4.5 billion and 5 billion euros, with cost savings of 1.5 billion euros targeted for the 2026-2028 period. It is important to note that the company's mid-term targets incorporate currently known tariff impacts but exclude ongoing litigation related to Philips Respironics, including the U.S. Department of Justice investigation.