Philips sees Q4 earnings down 40% due to a shortage of parts, fan withdrawals

Philips sees Q4 earnings down 40% due to a shortage of parts, fan withdrawals

Dutch health technology organization Philips on Wednesday said it expected fourth-quarter center benefit to drop around 40% to around 650 million euros ($739.25 million), hit by a worldwide deficiency of electronic parts and the aftermath of a monstrous review of ventilators. Comparable sales fell 10% consistently to 4.9 billion euros, Philips said in its profit warning, because of the shortage of parts, an absence of cargo capacity and clients deferring their orders.

The supply-chain problems added to the worries over the recall of ventilators, for which Philips said it had taken a new provision of 225 million euros, as more devices needed to be repaired than previously expected.

Sales were around 350 million euros lower than Philips had expected, taking comparable sales over 2021 down 1% – while the company had guided for a small increase.

Philips last year set aside 500 million euros for the operation, as it estimated it would replace up to four million ventilators and respiratory devices worldwide because of a polyurethane foam part that might degrade and become toxic.

The company will publish full quarterly and yearly results on Jan. 24.

Philips shares have lost around a third of their value since the company announced the recall in April last year.

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