FX.co ★ Philips Q2 Profit Surges, Confirms FY24 View; Stock Climbs

**Royal Philips NV Sees Significant Rise in Shares Following Q2 Earnings Report**

Royal Philips NV experienced an 11% surge in share value during morning trading in Amsterdam and pre-market activity on the NYSE. This uptrend followed the Dutch consumer electronics giant’s quarterly financial report, which showcased a significant profit increase in Q2, bolstered by insurance income related to Respironics product liability claims, despite nearly flat sales. Furthermore, the company upheld its fiscal 2024 outlook.

Philips CEO Roy Jakobs commented, "I am encouraged by our return to order intake growth this quarter, primarily driven by North America. Despite a challenging macro environment, we achieved strong margin improvement supported by our productivity program, solid operational cashflow due to improved working capital management, and comparable sales growth in line with our plan."

For fiscal 2024, Philips projects a 3% to 5% growth in comparable sales, an adjusted EBITA margin of 11% to 11.5%, and free cash flow ranging from 0.9 billion euros to 1.1 billion euros.

The company reiterated its confidence in meeting its 2025 targets, while remaining mindful of ongoing market uncertainties. However, the outlook does not account for potential impacts from ongoing legal proceedings related to Philips Respironics, including the US Department of Justice investigation.

During the second quarter, Philips' net income attributable to shareholders soared to 451 million euros from 72 million euros in the previous year. Earnings per share rose to 0.48 euro from 0.07 euro a year ago. Income from continuing operations per share was 0.33 euro for the latest quarter.

Adjusted income from continuing operations was 0.30 euro, up from 0.27 euro a year ago. This quarter’s results benefited from 538 million euros in insurance income related to Respironics product liability claims.

Net gain from restructuring, acquisition-related, and other items amounted to 381 million euros, reversing a loss of 161 million euros the previous year.

The group’s adjusted EBITA margin climbed to 11.1% from 10.1% last year, with improvements across all business segments. Adjusted EBITDA increased to 733 million euros from 681 million euros, with the adjusted EBITDA margin improving to 16.4% from 15.2% the previous year.

Group sales were slightly down at 4.462 billion euros compared to 4.470 billion euros last year. However, comparable sales growth stood at 2%, showing growth in both mature and emerging markets, offset by a decline in China.

The Diagnosis & Treatment segment saw a 4% rise in comparable sales, with 2% growth reported in both the Connected Care and Personal Health segments.

Comparable order intake increased by 9%. Philips noted that China remains a high-potential market despite the government’s anti-corruption measures impacting short-term hospital order lead times.

As of the latest trading, Philips shares in Amsterdam were at 26.36 euros, representing an 11.04% increase. In pre-market activity on the NYSE, the shares traded at $28.53, up 10.8%.