Shares in Dutch healthcare giant Royal Philips (NYSE:PHG) took a hit today after the company’s preliminary third-quarter sales missed the consensus forecast due to blowback from the trade war between the U.S. and China.
Amsterdam-based Philips said it expects group sales to reach nearly €4.7 billion ($5.2 billion), for comparable sales growth of about 6% compared with the same period last year. Net income is expected to reach €210 million ($231.2 million), including a goodwill impairment charge on its connected care business of €78 million ($85.9 million).
Analysts were looking for sales of €5.46 billion (about $6 billion). The news sent Philips stock down -8.8% to a €41.84 close today in Amsterdam. PHG shares were down -9% at $41.57 apiece today in mid-day trading in New York.
CEO Frans van Houten said headwinds from the tariff war and a too-slow response were partially to blame for the miss.
“We will drive further strong mitigating actions to accelerate the improvement,” van Houten said in prepared remarks “Philips has delivered three consecutive years of at least 100 basis points annual adjusted EBITA improvements. Given the overall significant headwinds and the underperformance of the connected care businesses, we expect that the full year 2019 adjusted EBITA margin improvement for the group will be 10 to 20 basis points. For 2020, we expect to deliver a 4% to 6% comparable sales growth and an adjusted EBITA margin improvement of around 100 basis points.”
Philips said it’s due to report full Q3 results Oct. 28.
($1 = €0.908399)