18 Oct 2021
Philips Lowered Profit Standpoint due to Device Recalls & Global Shortages of Parts
The Index Today
On Monday, Philips were seen lowered its standpoint for sales and profit growth in 2021, due to the massive recall of respiratory devices and a global shortage of electronic components hit its third-quarter earnings.
Reports from Reuters mentioned that the comparable sales in the July-September period fell 7.6% from last year as Philips started the recall of up to four million of its respiratory devices and ventilators, as parts might degrade and become toxic.
Philips revenue was also lower due to global supply chain problems, as a shortage of electronic components and parts meant it took Philips longer than expected to turn orders into sales.
Chief Executive Frans van Houten said that "Supply chain volatility has intensified globally, we expect this headwind to continue in the fourth quarter."
As a consequence, the Amsterdam-based company now expects "low single-digit" growth in comparable sales for this year, which is the lower end of its previous guidance, with only a "modest" improvement of its profit margin.