Royal Philips (NYSE: PHG) saw its stock fall more than 11% in value today after reporting that supply chain challenges were worse than expected during Q3 2022.
The result is that the Dutch medtech giant now expects third quarter sales to be down 5% year-over-year, to €4.3 billion ($4.2 billion). And even with the second half of 2022 still expected to be better than the first, Philips is predicting a mid-single-digit comparable sales decline in the fourth quarter. Company officials expect prolonged supply chain disruptions and a worsening macro-environment.
Investors reacted by sending PHG shares down more than 11% to $13.17 apiece by midday trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down more than 1%.
Philips plans to release its full Q3 results on Oct. 24, 2022.
Continued Philips Respironics problems
In addition to supply chain woes. a massive and deadly recall of CPAPs and other respiratory devices continues to dog Philips. The company said today that it expects to log a €1.3 billion ($1.2 billion) impairment of goodwill charge in Q3 as it faces a proposed U.S. Department of Justice consent decree.
Roy Jakobs, who took over the company’s handling of the recall last year, is moving into the CEO spot on Oct. 15.
In addition to the recall-related charge, Philips expects a €165 million ($160 million) charge related to refocusing its research and development toward fewer and better-resourced projects in the innovation pipeline.
Note: Currency converted as €1 = 97¢.
