Philips CEO Roy Jakobs reported a decline in third-quarter sales due to weak demand in China, prompting the company to lower its full-year sales forecast. Despite strong margins, both the consumer and hospital markets in China showed deterioration, although Jakobs remains optimistic about a future recovery. In contrast, North America is experiencing growth, with increasing demand for medical procedures and imaging.
Philips has reduced its 2024 sales growth forecast to a maximum of 1.5% due to weak demand from China, leading to a 16% drop in shares—the largest in two years. The company faces challenges from an anti-corruption campaign affecting medical technology purchases and ongoing recalls of defective sleep apnea devices, costing around $5 billion. CEO Roy Jakobs noted that uncertainty in China will persist, although growth remains solid in other regions.
European markets are set for a mixed opening as Philips lowers its full-year sales outlook due to deteriorating demand in China, now expecting growth of only 0.5% to 1.5%. CEO Roy Jakobs noted that while consumer confidence is weak, China remains a crucial market for future growth. Meanwhile, the Japanese yen has hit a three-month low against the dollar following recent elections.
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