Philips Earnings Miss on Inflation, China’s Covid Lockdowns

The company missed earnings estimates in the second quarter due to supply chain troubles and Covid lockdowns in China.

The Dutch maker of medical gear now sees a 2% to 3% sales growth in 2022, down from a previous estimate of 5%. In the first half of this year, sales and orders in China dropped by 30% compared to the same period last year.

Frans van Houten said that the company was hit by a lot of headwind in the second quarter.

We just need to get the supplies and the chips in place to deliver on the strong order book.

Europe's companies are struggling with high input costs and disrupted supply chains. Products ranging from cars to medical equipment have been affected by a global shortage of semiconductors.

In the second quarter, adjusted earnings before interest, taxes and amortization fell short of an average estimate of 347 million euros.

There are about 300 court cases over noise-dampening foam inside ventilators. According to users, inhaling the foam after it dies poses a cancer risk. The first recall of the devices took place in June of last year.