AMSTERDAM Reuters - The Dutch health technology company Philips lowered its outlook for revenue and profit growth in 2021 to 48 hours after a massive recall of respiratory instruments and a global shortage of electronic components hit its third-quarter earnings.
Comparable sales in the July-September period fell 7.6% from last year, when Philips started recalling four million of its respiratory devices and ventilators as parts may degrade and become toxic.
The revenue was also lower due to global supply chain problems, as a shortage of electronic components and parts meant it took Philips longer than expected to turn orders into sales.
Supply chain volatility has intensified globally, CEO Frans van Houten said. This headwind is expected to continue in the fourth quarter. As a consequence, the Amsterdam-based company expects modest growth in comparable sales for this year, which is the low end of its previous guidance with only a single data point improvement of its profit margin.
Adjusted earnings before interest, taxes and amortisation EBITA fell 25% in the third quarter to 512 million euros $592.7 million while analysts had predicted a drop to 490 million euros in a company poll on average.