Royal Philips (NYSE:PHG) shares took a hit today on fourth-quarter results that came up shy of the consensus forecast.
The Amsterdam-based company posted profits of $183 million (€162 million), or 18¢ (€0.16) per share, on sales of $5.5 billion (€4.9 billion) for the three months ended Dec. 31, 2021, for a 75.2% bottom-line slide on a sales decline of 5.6%.
Adjusted to exclude one-time items, earnings per share were 64¢ (€0.57), 73¢ behind Wall Street, where analysts were looking for sales of $5.9 billion.
“In the fourth quarter, we recorded €4.9 billion sales, reflecting a 10% comparable sales decline, with an adjusted EBITA margin of 13.1%,” Philips CEO Frans van Houten said in a news release. “As we announced on January 12, 2022, sales were impacted by several headwinds, namely supply chain challenges, postponement of equipment installations in hospitals related to COVID-19, and the consequences of the Respironics field action.
van Houten said on Philips’ earnings call today (as transcribed by AlphaStreet), that the supply chain issues and the Respironics recall have no relationship and are separate, ongoing problems.
On the recall, van Houten confirmed that Philips expects testing and analysis on its DreamStation devices’ performance related to ISO safety standards to be completed in the second quarter of 2022.
“We’ve made organizational changes throughout 2021, which include on-boarding new top management in the sleep and respiratory care business and further strengthening our quality and regulatory affairs leadership for the group, the Connected Care and the sleep and respiratory care businesses,” van Houten said. “Moreover, we have added resources to cross-check learnings from the sleep recall where relevant and strengthened capabilities around post-market surveillance, medical affairs, bio compatibility and toxicology within Philips. Our experts, as well as certified labs and qualified third-party experts, are closely working with the Respironics teams.”
Philips did not offer guidance for 2022.
PHG shares were down 4.3% at $31.70 per share in early-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was down 1.4%.