Published by Global Banking & Finance Review®
Posted on February 10, 2026
3 min readLast updated: February 10, 2026
Add as preferred source on GooglePhilips revises its 2026 sales growth forecast to 3-4.5% due to increased U.S. tariffs, impacting margins despite cost cuts. Free cash flow is expected between 1.3 and 1.5 billion euros.
By Leo Marchandon
Feb 10 (Reuters) - Dutch health technology group Philips reported strong fourth-quarter results and forecast an improvement in 2026 core profit margin on Tuesday, even as U.S. tariffs continue to weigh on profitability.
The company's shares jumped 10% in early Amsterdam trading, on track for their biggest one-day rise since July 2024.
Philips CEO Roy Jakobs had warned in December that tariff headwinds were expected to almost double in 2026, and the company was widely expected to lower its annual forecasts on Tuesday.
Philips said it expected comparable sales growth of 3% to 4.5% this year, below the roughly 4.5% growth it had guided for previously. But its adjusted core profit is expected to rise to between 12.5% to 13%, versus 12.3% last year.
"Confirmation that Philips moves into right direction," analysts from Kepler Cheuvreux said about the results and outlook. J.P. Morgan said the margin guidance was above market expectations.
The cautious sales outlook reflects the mounting tariff pressures and persistent weakness in China, where revenue continues to decline amid anti-corruption policy changes and weak hospital spending.
Philips reported fourth-quarter sales of 5.1 billion euros ($6.1 billion), with full-year sales rising 2% to 17.8 billion euros. The margin of adjusted earnings before interest, taxes and amortisation (EBITA) to sales rose to 15.1% in the quarter, from 13.5% a year earlier.
It also announced financial targets for 2026-2028, seeing annual sales growth in a mid-single-digit percentage and profit margins reaching mid-teens by 2028.
Barclays analysts said those targets were roughly 10% higher than market expectations, helping fuel investors' optimism.
CEO JAKOBS PLAYS UP AI DATA BOON
Talking to reporters after the results, Jakobs said the group's AI strategy and vast healthcare data access gave it an advantage against many rivals.
All the products Philips sells in the healthcare sector use components utilising artificial intelligence, including AI algorithms that predict heart attacks and bedside monitoring that analyses imaging data, he said.
"We don't need to acquire data. We work together with customers on data," Jakobs said, brushing off questions about data-driven spending.
Philips' installed base, including monitoring systems in nine out of ten U.S. hospitals, generates "massive amounts of data every day", giving it direct access without acquisition costs, he added.
The company also proposed re-appointing Jakobs, whose term is ending, as chief executive during a shareholder meeting in May.
($1 = 0.8399 euros)
(Reporting by Leo Marchandon in Gdansk; Editing by Matt Scuffham and Milla Nissi-Prussak)
Free cash flow is the cash generated by a company after accounting for capital expenditures. It indicates how much cash is available for distribution among all security holders.
U.S. tariffs are taxes imposed on imported goods and services. They are used to protect domestic industries and can influence prices and trade relationships.
Comparable sales refer to the sales of similar products or services in a specific market. They are used to gauge performance and set future sales expectations.
Margin pressure occurs when a company's profit margins are squeezed due to rising costs or competitive pricing, impacting overall profitability.
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