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Investing.com -- Philips (AS:PHG) on Tuesday lowered its profit margin forecast for 2025, citing a financial hit from anticipated U.S. tariffs on Chinese imports.
The Dutch health technology company now expects its adjusted EBITA margin to fall within the range of 10.8% to 11.3%, down from its previous guidance of 11.8% to 12.3%.
Philips estimates the net impact of the tariffs will be between €250 million and €300 million, despite efforts to mitigate the blow through relief measures and exemptions such as those outlined in the Nairobi Protocol, which provides tariff relief for certain medical devices used to treat chronic conditions.
CEO Roy Jakobs acknowledged the uncertainty surrounding the evolving tariff landscape, saying, “In an uncertain macro environment that has intensified due to the potential impact of tariffs, we are focused on what we can control.”
Despite the margin downgrade, Philips reported better-than-expected first-quarter results.
Sales for Q1 came in at €4.10 billion, down 2% year-on-year on a comparable basis, but ahead of the consensus estimate of €4.02 billion. A strong performance in North America helped offset weaker results in China.
The company maintained its guidance for full-year comparable sales growth of 1% to 3%, maintaining a cautious but steady outlook amid global economic headwinds.