By Elena Vardon
Royal Philips is scheduled to report results for its fourth quarter and 2023 on Monday. Here is what you need to know:
SALES FORECAST: The Dutch health-technology company is expected to post 5.33 billion euros ($5.79 billion) in sales for the three months ended Dec. 31, according to a company-compiled consensus, against EUR5.42 billion in the same quarter the previous year. Estimates have comparable sales growth at 2.6% for the period. Deutsche Bank analysts expect a decent quarter “driven by continued solid growth in the diagnostics & treatment and personal-health segments, whereas the connected-care segment should be weak,” they wrote in a note. Consensus pencils EUR18.44 billion in sales for 2023. Comparable sales growth for the full year is seen at 6.8%, while the company recently lifted its guidance to between 6% and 7% growth for the year.
ADJUSTED EBITA MARGIN FORECAST: Philips’s adjusted earnings before interest, taxes and amortization margin is expected at 12.6% by consensus for the quarter and 10.5% for the year, against its 2023 guidance of a 10% to 11% margin.
NET INCOME FORECAST: Analysts estimate that the Amsterdam-listed group will report EUR331 million in net income attributable to shareholders for the quarter–compared with EUR157 million in the fourth quarter of 2022–and a narrower net loss for 2023 at EUR174 million.
WHAT TO WATCH:
–2024 OUTLOOK: The company is expected to guide for mid-single-digit organic sales growth and 50 to 100 basis points of adjusted earnings EBIT margin expansion, in line with consensus expectations, according to Deutsche Bank analysts.
–ORDER INTAKE: Investors will be watching Philips’s quarterly new orders closely after its third-quarter intake fell given high comparisons, lower orders in China and longer lead times.
–RESPIRONICS RECALL: Analysts don’t expect a meaningful update on the recall of its sleep apnea devices at these results. The overhang from the recall is expected to offset the company’s recovery, ING analyst Marc Hesselink wrote in a note.
Philips shares have gained 42% in the past 12 months and trade at EUR21.05.
Write to Elena Vardon at [email protected]
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