RMD - Philips falls despite guidance raise as order intake falls

2023-07-24 15:07:25 ET

Philips ( NYSE: PHG ) ADRs slipped ~6% on Monday, marking the second biggest intraday decline for the year after the company indicated a decrease in comparable order intake despite raising its full-year outlook with its Q2 2023 results.

The Dutch medical device maker delivered modest top- and bottom-line beats for the quarter as group sales reached EUR 4.5B (~$5.0B) with ~9% YoY comparable sales growth.

While the order book expanded ~3% YoY, comparable order intake fell 8% YoY (-4% outside Russia), indicating the fourth consecutive quarterly decline following a strong order intake in the prior-year quarter.

However, according to the company, the order intake remains significantly better than the pre-COVID level. Philips' ( PHG ) rival in the respiratory care market, ResMed ( RMD ), also traded lower following two consecutive sessions of gains.

Meanwhile, Connected Care comparable sales improved ~6% YoY amid a decline in Sleep & Respiratory Care as demand normalized following strong growth in 2021 and 2022.

For 2023, Philips ( PHG ) projects its comparable sales growth to reach mid-single digits and its adj. EBITDA margin to stand at the upper end of the high-single digit range.

In its previous forecast, the company estimated revenue growth and adj. EBITDA to reach low-single-digit growth and "high single-digit," respectively.

Philips ( PHG ) updated details in its program to address the previously announced recall of sleep care devices. The company said it had manufactured 99% of the new replacement devices and repair kits required for the corrective action.

More on Phillips

• Philips says checks on 95% of recalled devices suggest unlikely to harm health
• Philips: Focus On Business Optimization And Agility Supports Value

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