Philips Exceeds Q2 Profit Estimates, US Tariff Refunds Boost Outlook to 2026
Philips' Q2 Performance and Upgraded Outlook
Strong Second-Quarter Results Surpass Expectations
July 27 (Reuters) - Dutch healthcare technology company Philips reported second-quarter profit margins above market expectations on Monday, helped by U.S. tariff refunds, and lifted its 2026 outlook to include benefits from the repaid levies.
Impact of US Tariff Refunds
Philips, which makes over 40% of its sales in North America, was among European companies hardest hit by U.S. import tariffs, and it is one of the first to flag refunds, potentially ushering in a wave of rebates.
Upgraded Financial Guidance
• Philips said it now expects a full-year adjusted earnings before interest, taxes and amortisation (EBITA) margin of 13.5%-14.0%, up from 12.5%-13.0% previously, including a U.S. tariff refund benefit of about 1%.
• It also forecast free cash flow of €1.5-1.7 billion, up from €1.3-1.5 billion in a previous forecast.
• Its adjusted EBITA margin grew to 16.4% in the second quarter, compared with analysts' average forecast of 12.1%. That includes a U.S. tariff refund benefit of 4.2%.
CEO Statement and Market Environment
• "We largely completed the U.S. tariff refund process during the quarter and continue to actively manage the broader macro environment, including inflation," Philips CEO Roy Jakobs said in a statement.
Sales Growth and Analyst Expectations
• Sales grew 4% to €4.4 billion on a comparable basis. Analysts had expected them to grow 3.8% to €4.26 billion on average, in a poll provided by Philips.
Additional Information
($1 = 0.8797 euros)
(Reporting by Alessandro Parodi and Lucie Barbier in Gdansk, editing by Rosalba O'Brien)
