Philips Stock Tanks on Outlook Cut as Demand Deteriorates in China

Core Insights - Koninklijke Philips' American depositary receipts (ADRs) are down over 15% in premarket trading following a reduction in the 2024 sales outlook due to a "significant deterioration" in demand from China [1][2] - The company has revised its 2024 comparable sales growth forecast to a range of 0.5% to 1.5%, down from the previous estimate of 3% to 5% [1][2] Financial Performance - Philips reported third-quarter sales of 4.38 billion euros ($4.74 billion), a decrease from 4.47 billion euros in the same quarter last year, and below the consensus estimate of 4.55 billion euros [3] - The net income for the third quarter was 181 million euros, with earnings per share (EPS) of 0.19 euros, both of which fell short of estimates; however, adjusted EPS of 0.32 euros narrowly exceeded expectations [4] - Despite a 40% increase in ADRs this year until the previous Friday's close, the current premarket trading reflects a 16% decline [4] Market Commentary - CEO Roy Jakobs noted the continued impact from China, stating that demand from hospitals and consumers in China has further deteriorated, while growth remains solid in other regions [3]