Philips returns to profit in FY25, eyes further margin improvement

(Sharecast News) - Dutch electronics giant Philips posted a solid set of fourth-quarter results on Tuesday and said it expects to see further margin improvements in 2026, even as US tariffs continue to weigh on profitability.

Shares traded higher in early trading, putting the stock on course for its biggest oneday rise since mid2024, as Philips also revealed it had returned to profit while continuing to move past the fallout from its sleepapnoea device recall.

Philips said Q4 sales came in at �5.1bn, with fullyear revenue rising 2% to �17.8bn. Adjusted underlying earnings margins improved to 15.1% in the quarter, up from 13.5% a year earlier.

For the full year, after posting three consecutive annual losses, Philips reported a fullyear profit of �897m, comfortably ahead of analyst expectations.

Chief executive Roy Jakobs had previously warned that tariff pressures would almost double in 2026, leading the group to trim its sales outlook accordingly, with Philips now expecting comparable sales growth of 3% to 4.5% in 2026, down from prior guidance of around 4.5%. Adjusted core profit margins, on the other hand, were forecast to rise to between 12.5% and 13%, up from 12.3% last year.

Philips' softer sales outlook reflects ongoing tariff headwinds and continued weakness in China, where revenue remains under pressure amid anticorruption measures and subdued hospital spending.

The Amsterdam-listed firm also set out financial targets for 2026-28, with the group aiming for midsingledigit annual sales growth and profit margins reaching the midteens by 2028.

As of 1150 GMT, Philips shares were up 8.27% at �26.71 each.

Reporting by Iain Gilbert at Sharecast.com