Philips sees lower comparable sales in first quarter on weak China spending

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.

"We expect the Q1 commentary and orders to weigh on the shares," J.P. Morgan said in a note.

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 China, while regulations and anti-corruption policies in the country will have an impact on healthcare procurement processes, CEO Roy Jakobs told journalists.

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.

Philips is in talks with the U.S., Europe and China regarding tariffs and is advocating the need to protect healthcare as a "very essential need", Jakobs told journalists.

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.

For 2025, Philips forecast a 1% to 3% growth in comparable sales, compared with a 1% rise in 2024.

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)