Philips expects profit to fall by $1.3 billion, sleep business hit

AMSTERDAM, Oct 12 (Reuters) – Dutch health technology company Philips (PHG.AS) said on Wednesday that its third-quarter core profit would fall by about 60 percent, marking a drop in a 1.3 billion euro ($1.26 billion) profit. TOLL. Its troubled sleep and respiratory care business.

In a trade update, Philips said its third-quarter comparable sales fell about 5% as supply chain issues remained worse than the company expected.

Philips said it expects to push adjusted earnings before interest, taxes and amortization (EBITA) down to 210 million euros, or about 5 percent of sales.

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Adjusted EBITA for the third quarter of 2021 was EUR 512 million.

The damage to the sleep care business is the result of a consent decree proposed by the U.S. Food and Drug Administration to address a problem that has led to a global recall of ventilators, which has wiped about 27 billion euros from Philips’ global market value. Suitable for 15 more read more

The company spokesman, Steve Klink, said the impairment was a “best estimate” of the likely consequences of the FDA’s action on enterprise value, while negotiations with supervisors were ongoing.

Philips said it expects supply chain issues and slowing global economic growth to also lead to a “mid-single-digit” drop in comparable sales in the fourth quarter, with an adjusted EBITA margin in the “single-digit to double-digit” range.

Philips will report full third-quarter results on October 1. twenty four.

(1 USD = 1.0298 EUR)

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Reporting by Bart Meijer; Editing by Kim Coghill and Uttaresh.V

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