Royal Philips (NYSE:PHG) shares took a hit today on first-quarter results that felt the effects of ongoing issues with supply chain and recalls.
PHG shares were down 12.1% at $26.67 in midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was virtually even on the day.
In announcing its quarterly results, Philips also disclosed that Philips Respironics and certain of its U.S. subsidiaries received a subpoena from the U.S. Department of Justice (DOJ) to provide information related to events leading to its major Respironics recall last year.
The Amsterdam-based company posted losses of $161.8 million (€151 million), or 18¢ (€0.17) per share, on sales of $4.2 billion (€3.9 billion) for the three months ended March 31, 2022, for a bottom-line slide into the red on sales growth of 2.4%.
Adjusted to exclude one-time items, earnings per share came in at 16¢ (€0.15).
Philips CEO Frans van Houten said in a news release that the company’s results came in “challenging circumstances” with significant supply chain headwinds and the consequences of its ongoing issues with ventilator recalls.
Additionally, van Houten said the company’s ability to achieve financial targets hinges on the increasing risks related to COVID-19, particularly in China, as well as the ongoing Russa-Ukraine war, supply chain issues and inflationary pressures.
“Our teams are fully focused on everyday execution, delivering on the customer demand and strong order book, and addressing the supply chain risks,” van Houten said. “We are implementing additional cost measures, as well as price increases, to mitigate the inflationary headwinds.”