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Philips Stock Tanks on Outlook Cut as Demand Deteriorates in China

American depositary receipts (ADRs) of Koninklijke Philips are tumbling more than 15% in premarket trading Monday after the Dutch conglomerate cut its 2024 sales outlook amid a "significant deterioration" in Chinese demand.
The company also posted quarterly results that mostly missed analysts' consensus forecasts.
Philips said it now expects 2024 comparable sales growth between 0.5% and 1.5%, down from its previous forecast of between 3% and 5%.

American depositary receipts (ADRs) of Koninklijke Philips (PHG) are tumbling more than 15% in premarket trading Monday after the Dutch conglomerate cut its 2024 sales outlook amid a "significant deterioration" in Chinese demand.

The company also posted quarterly results that mostly missed analysts' consensus forecasts.

Philips said it now expects 2024 comparable sales growth between 0.5% and 1.5%, down from its previous forecast of between 3% and 5%.

"In the quarter, demand from hospitals and consumers in China further deteriorated, while we continue to see solid growth in other regions," Chief Executive Officer (CEO) Roy Jakobs said. "We have adjusted our full-year sales outlook to reflect the continued impact from China."

Philips' third-quarter sales of 4.38 billion euros ($4.74 billion) were down from the 4.47 billion euros posted last year, and also lagged the consensus estimate of 4.55 billion euros from analysts polled by Visible Alpha.

Its third-quarter net income of 181 million euros and earnings per share (EPS) of 0.19 euros also fell short of estimates, although adjusted earnings of 0.32 euros per share narrowly beat expectations.

The company's ADRs had been up 40% this year through Friday's close but are 16% lower in premarket trading.