Philips lowers tariff impact estimate by 100 million euros after US-EU deal
The group, which sells products ranging from toothbrushes to medical imaging systems, said it expected an impact of 150-200 million euros ($173-232 million) from the tariffs this year, lower than the 250-300 million euros it had estimated previously.
Its Amsterdam-listed stock was expected to rise between 4% and 5% in early Tuesday trading, according to two traders.
The tariff impact "has evolved and continues to be dynamic", Philips said in a statement.
Its CEO Roy Jakobs told journalists that the U.S.-EU deal provided clarity, but Philips would continue to ask for an exemption from tariffs and other trade barriers for the healthcare sector, including in the U.S. and in China.
China announced earlier this month it was restricting government purchases of medical devices from the EU that exceed 45 million yuan ($6.27 million) in value, in retaliation to Brussels' own curbs last month.
"We have localized 90% of what we sell in China to manufacture in China, so this is not something of significance to us," Jakobs said, adding the Chinese market was slowly recovering.
Philips also increased its core profit (EBITA) margin forecast to a range of 11.3% to 11.8% for the year, from the previously guided 10.8% to 11.3%.
Its second-quarter adjusted EBITA margin grew to 12.4%, beating analysts' average forecast of 9.9%, while sales were in line with market expectations at 4.3 billion euros.
Philips operates through its Personal Health, Diagnosis & Treatment, and Connected Care segments. Its top selling products include image-guided and diagnostic systems, consumer electronics and appliances.
The company said its comparable order intake grew by 6% in the quarter, citing the impact of innovations including AI-enabled diagnostic systems.
The group also said it had signed a long-term deal with the Indonesian Ministry of Health for its Azurion image-guided therapy system for cardiac, stroke and cancer care.
($1 = 0.8630 euros)
($1 = 7.1764 Chinese yuan renminbi)
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