Philips Q1 Earnings and Revenues Decrease Year over Year, Shares Up

Koninklijke Philips PHG reported first-quarter 2026 adjusted earnings of €0.23 per share, down 8.0% year over year. The company had reported adjusted earnings of €0.25 per share in the year-ago quarter.Sales totaled €3.91 billion, down 4.7% on a reported basis. Comparable sales increased 4% year over year, which was driven by growth across all segments. The Diagnosis & Treatment segment recorded 2% growth, Connected Care recorded 3% growth and Personal Health showed 9% growth.Further, Philips’ comparable order intake increased 6% year over year in the first quarter.Geographically, comparable growth was led by Mature geographies, supported by strength in North America and Western Europe, while Growth geographies were flat on a comparable basis. Growth geographies showed flat comparable sales. Growth in the Diagnosis & Treatment and Personal Health segments was mainly offset by the segment Other and a slight decline in Connected Care. Comparable sales in Mature geographies grew 5% in the reported quarter, mainly driven by North America and Western Europe.Koninklijke Philips N.V. Price, Consensus and EPS Surprise Koninklijke Philips N.V. price-consensus-eps-surprise-chart | Koninklijke Philips N.V. QuotePhilips’ stock gained 2.17% in pre-market trading.PHG’s Segmental UpdateDiagnosis & Treatment revenues declined 6% from the year-ago quarter to €1.85 billion. Comparable sales increased 2% year over year. High-single-digit growth in Image Guided Therapy was partly offset by a low-single-digit decline in Precision Diagnosis. Connected Care revenues decreased 10.2% year over year to €1.06 billion. Comparable sales increased 3% year over year, mainly driven by mid-single-digit growth in Monitoring. Personal Health revenues grew 0.9% year over year to €818 million. Comparable sales increased 9% year over year, driven by double-digit growth in Growth geographies and high-single-digit growth in Mature geographies. Other segment sales amounted to €177 million, up 26.4% on a year-over-year basis.PHG’s Operating DetailsGross margin contracted 10 basis points (bps) on a year-over-year basis to 45.1% in the reported quarter.General & administrative expenses, as a percentage of sales, were 4.5%, which expanded 60 bps on a year-over-year basis. Moreover, selling expenses decreased 70 bps year over year to 25.8%. Research & development expenses decreased 110 bps to 10.1%.Restructuring, acquisition-related, and other items amounted to €61 million compared with €143 million a year ago. Philips remains on track to deliver its three-year €1.5 billion productivity program, including €126 billion in savings in 2025.Profitability was mixed by segment. Phillips adjusted EBITA — the company’s preferred measure of operational performance — decreased 0.3% year over year to €353 million. EBITA margin expanded 40 bps on a year-over-year basis to 9% in the reported quarter.Diagnosis & Treatment recorded a 9.8% adjusted EBITA margin, up 30 basis points year over year. Connected Care’s adjusted EBITA margin declined 60 basis points to 2.9%, reflecting higher tariffs and cost inflation. Personal Health expanded adjusted EBITA margin by 60 basis points to 15.8%, supported by higher sales and productivity, partly offset by higher tariffs and increased advertising and promotions spend.Philips Cash Flow Improves and Balance Sheet Stays SolidAs of March 31, 2025, Philips’ cash and cash equivalents were €2.59 billion compared with €2.79 billion as of Dec. 31, 2025. Total debt was €8.10 billion compared with €8.08 billion as of Dec. 31, 2025.Operating cash flow was €188 million versus €933 million outflow in the year-ago quarter, when results reflected a large Respironics-related settlement payment. Free cash flow was positive €28 million against a €1.09 billion outflow a year earlier, reflecting improved earnings and working capital dynamics.PHG Reiterates 2026 OutlookPHG reiterated its full-year 2026 outlook, calling for 3%-4.5% comparable sales growth, an adjusted EBITA margin of 12.5%-13.0% and free cash flow of €1.3-€1.5 billion. The company noted the outlook includes currently known tariff impacts within an uncertain macro environment and excludes potential tariff refunds and ongoing Philips Respironics-related proceedings.PHG Zacks Rank & Stocks to ConsiderPhilips currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader Zacks Medical sector include Agilent Technologies A, Agenus AGEN, and Doximity DOCS. While Agenus stock currently sports a Zacks Rank #1 (Strong Buy), Agilent Technologies and Doximity stock carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Shares of Agilent Technologies have lost 13.5% in the year-to-date period. Agilent Technologies is set to report the second quarter of fiscal 2026 results on May 27.Agenus shares have gained 23.8% in the year-to-date period. Agenus is scheduled to report its first-quarter 2026 results on May 11.Doximity shares have lost 42% in the year-to-date period. Doximity is set to report its fourth-quarter fiscal 2026 results on May 13.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks