Philips experiences profit decrease due to $300M impact from tariffs

From Yahoo Finance: 2025-05-06 12:38:00

Philips stock dropped over 4% despite a solid first-quarter earnings report. Revenue hit $4.7 billion, meeting estimates. Adjusted earnings per share exceeded expectations at 28 cents. CEO Roy Jakobs affirmed 2025 sales guidance but lowered profit due to $280-340 million in tariff impacts.

The medical device maker faces challenges from Trump’s tariffs on Chinese imports. With reciprocal tariffs between the US and China, Philips is heavily affected. Jakobs is engaging with governments to reduce tariffs’ impact. The company is localizing supply chains to mitigate disruptions and maintain resilience.

Philips already has 46 sites in the US and plans further expansion. The company is implementing cost-saving measures to avoid passing increased costs to customers. Regionalizing supply chains began during the pandemic to enhance resilience. Jakobs emphasized the importance of producing and delivering closer to demand.

80% of Philips’ products are medical devices, making an exemption crucial for the company. Jakobs stressed the need for reduced tariffs to alleviate financial pressure. Philips is focused on navigating challenges, maintaining profitability, and securing its supply chain for the future.

Read more: Philips cuts profit, sees $300M impact from tariffs