Philips beats second-quarter profit estimates helped by tariff refunds
PHG•Second-quarter profit margins beat expectations
Dutch healthcare technology company Philips reported second-quarter profit margins above market expectations on Monday, helped by U.S. tariff refunds, and lifted its 2026 outlook to include benefits from the repaid levies.
Philips, which makes over 40% of its sales in North America, was among European companies hardest hit by U.S. import tariffs, and it is one of the first to flag refunds, potentially ushering in a wave of rebates.
Outlook raised as tariff refund benefits flow through
- Philips said it now expects a full-year adjusted earnings before interest, taxes and amortisation (EBITA) margin of 13.5%-14.0%, up from 12.5%-13.0% previously, including a U.S. tariff refund benefit of about 1%.
- It also forecast free cash flow of €1.5-1.7 billion, up from €1.3-1.5 billion in a previous forecast.
- Its adjusted EBITA margin grew to 16.4% in the second quarter, compared with analysts' average forecast of 12.1%. That includes a U.S. tariff refund benefit of 4.2%.
- "We largely completed the U.S. tariff refund process during the quarter and continue to actively manage the broader macro environment, including inflation," Philips CEO Roy Jakobs said in a statement.
- Sales grew 4% to €4.4 billion on a comparable basis. Analysts had expected them to grow 3.8% to €4.26 billion on average, in a poll provided by Philips.
($1 = 0.8797 euros)
