Philips N. V. NYSE: PHG AMSTERDAM Euronext: PHIA, PHG

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Philips (AS:PHG) stock soared over 10% as investors reacted positively to the Dutch health technology company booking a $630 million provision as part of a planned settlement in the U.S. over the recall of millions of devices that treat sleep apnea, with CEO Roy Jakobs calling this an "important step in addressing the litigation."
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AMSTERDAM (Reuters) -Philips shares jumped 13% on Monday as the Dutch health technology company reported much better than expected first-quarter results and said it had set aside 575 million euros ($631 million) related to lawsuits over its recall of respiratory devices.

Amsterdam-based Philips has been grappling with the fallout of the global recall of millions of respirators used to treat sleep apnoea since it was announced in June 2021 over worries that foam used in the machines could become toxic.

The recall has knocked off around 70% of Philips' market value since then as investors feared the costs of a string of U.S. class-action lawsuits launched by patients who claim to have suffered economic losses due to the use of the device.

"We are happy we can solve this case," CEO Roy Jakobs said about the provision for the settlement Philips expects to reach in the current quarter.

"We will continue to work on finding solutions for the other cases."

Analysts, however, warned that much remained unclear regarding the total costs of the recall.

Philips still has to reach a settlement with the U.S. Food and Drug Administration (FDA) and is also facing lawsuits from individual patients over health problems they claim were caused by the devices.

"The more significant medical litigation risk and the consent decree impact remain," ING analysts said in a note.

"Overall we believe this is a positive update but it also underlines that litigation impact and market uncertainty are not out of the way."

Philips said the outcomes of negotiations with the FDA and the other lawsuits were still too uncertain to make a provision.

The company reported an almost 50% jump in first-quarter core profit to 359 million euros, with comparable sales up 6% from a year earlier.

Analysts in a company-compiled poll had on average forecast adjusted earnings before interest, taxes and amortisation (EBITA) would fall 15% on sales growth of less than 2%.

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17.06.23


Philips (AS:PHG) stock rose 3.5%, with the Dutch healthcare technology group continuing to benefit from the news earlier this week that Exor, the investment arm of Italy's Agnelli family, has become the top investor by buying 15%.

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(Reuters) -Health technology group Philips posted a fourth straight drop in order intake on Monday and warned that it expects global market conditions to remain highly uncertain, sending its shares down 5% from a recent 12-month high.

The Amsterdam-based group, a former industrial conglomerate that now focuses on medical technology, said order intake had decreased 8% in the April-June period, the fourth quarterly fall in a row.

The maker of electric toothbrushes and CT scanners said it had a "particular concern" on the development of relationships between the United States, China and the European Union, as well as China's drive to become self-sufficient in critical technologies, including in health-related areas.

Chief Executive Roy Jakobs, who recently met company and government officials in China, said however current demand in the country was robust.

The group reported a 15% sales increase in its so-called "growth geographies region" for the quarter and said China, the Middle East, Turkey and Latin America had strongly contributed to this rise.

Philips generates 15% of group sales in the People's Republic.

New licensing requirements for its healthcare products in Russia were responsible for half the quarterly order decline, Jakobs said.

Philips still delivers hospital equipment such as large medical scanners to Russia despite Western sanctions following the country's war on Ukraine, but no personal healthcare products.

The group is confident of seeing orders increase in the second half, boosted by strong demand for its diagnostic imaging and ultrasound devices, and its data analyses tools, finance chief Abhijit Bhattacharya told an investor call.

The group slightly updated its full-year targets and now expects comparable sales growth of "mid-single digits" versus previous guidance of low-single-digit growth.

The adjusted EBITA margin is now seen at the upper end of the previously forecast "high single-digit" range.

Analysts at ING, who maintained their "hold" rating on the stock, said the new guidance was not too challenging given the strong first-half figures.

The Amsterdam-listed shares, which rose as high as 20.845 euros earlier this week, their highest since July 2022, fell as much as 7.7% and traded 5.6% lower at 19.67 euros by 1103 GMT.

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Philips (AS:PHG) stock rose 3.5%, with the Dutch healthcare technology group continuing to benefit from the news earlier this week that Exor, the investment arm of Italy's Agnelli family, has become the top investor by buying 15%.

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AMSTERDAM (Reuters) -The Dutch financial markets watchdog said on Monday an investigation had revealed that Goldman Sachs held a large gross short position in healthcare equipment maker Philips (AS:PHG) on Aug. 14, counterbalancing a previously disclosed long position.

There was no suggestion of any wrongdoing.

The additional disclosure is part of a review by the Financial Markets Authority (AFM) into how investment firm Exor NV (AS:EXOR) managed to acquire a 15% stake in Philips in a surprise move on Aug. 14 without triggering disclosures that it had been building a stake.

Goldman Sachs, which acted on behalf of Exor, declined comment.

The review "has led to the additional disclosures of gross short positions by Goldman Sachs in the AFM register", the agency said in an e-mailed statement.

Dutch newspaper FD first reported on the new disclosures, which were added to the register on Friday.

While Philips and most shareholders welcomed Exor's investment, shareholder groups questioned how the stake had been acquired so quickly. Dutch market rules require disclosures when an investor passes ownership thresholds of more than 3%, 5% and 10% in a public company.

Philips said at the time a bank had acted on behalf of Exor and built much of the stake using a derivatives structure, but it could not comment further. A Philips spokesperson said on Monday the company had no additional comment.

A spokesperson for Exor on Tuesday repeated that the Aug. 14 acquisition had respected all market rules.

U.S. Securities and Exchange Commission filings showed Exor had obtained a 2.99% stake in Philips by June 30, just below the Dutch disclosure threshold.

An AFM filing first published on Aug. 17 had showed Goldman Sachs holding a long position of 12.17% in Philips as of Aug. 14, mostly in call options.

That filing has now been revised to show Goldman also was holding an indirect short position of 12.04% on Aug. 14.

That would set the investment bank up to execute either side of the trade, in this case the "buy" side, on behalf of its client, although it is not certain what Goldman did.

The AFM said it was now in talks with "market parties and relevant stakeholders" to see where guidance, or perhaps new rules, are needed about transaction structures by which large stakes can be taken in publicly listed companies in a very short period of time."

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Philips (NYSE:PHG) ADRs fell 8.8% after the U.S. drug regulator deemed its handling of the recall of millions of ventilators used to treat sleep apnea inadequate.