Shares in Dutch health technology group Koninklijke Philips NV (AS:PHG) rose more than 6% on Tuesday after the company posted stronger-than-expected fourth-quarter results and issued 2026 guidance that analysts said implied upside to earnings expectations.
Philips reported a 7% rise in comparable fourth-quarter sales and a 160-basis-point improvement in adjusted EBITA margin to 15.1%, as demand across its medical systems and personal health businesses offset higher tariffs.
The company generated €5.10 billion in quarterly sales, broadly flat year-on-year, while comparable order intake rose 7%, signalling continued momentum into 2026.
Track breaking market moves with live headlines and analyst notes - up to 50% off Income from operations jumped to €540 million from €199 million a year earlier, supported by higher gross margins, lower restructuring costs and fewer impairments.
Adjusted EBITA rose to €770 million from €679 million, while net income swung to a profit of €397 million from a loss of €333 million in the prior-year quarter, helped by a favourable tax movement.
Free cash flow totalled €1.20 billion in the quarter, compared with €1.29 billion a year earlier, despite ongoing quality-related costs linked to Philips’ Respironics sleep-apnoea devices.
All three business segments contributed to Q4 growth: Diagnosis & Treatment posted 4% comparable sales growth, Connected Care 7%, and Personal Health 14%.
Chief executive Roy Jakobs said that Philips “ended the year with strong order growth and sales, robust margin expansion despite tariffs, solid cash generation, and we exit the year with a robust balance sheet.”
By division, Diagnosis & Treatment posted 4% comparable sales growth, Connected Care grew 7%, and Personal Health surged 14%, with margins in Connected Care and Personal Health coming in well above market expectations.
For the full year, Philips reported sales of €17.83 billion, down 1% nominally but up 2% on a comparable basis. Adjusted EBITA rose to €2.20 billion, lifting the margin to 12.3%, while net income improved to €897 million from a loss a year earlier.
Analysts at RBC Capital Markets said the fourth-quarter results were ahead of consensus, driven by stronger-than-expected performance in Connected Care and Personal Health, while margins exceeded expectations by a wide margin.
They added that the midpoint of Philips’ 2026 guidance implies around 5% upside to consensus adjusted EBITA estimates, reflecting a higher-than-expected 2025 base.
Philips forecast 2026 comparable sales growth of 3% to 4.5%, an adjusted EBITA margin of 12.5% to 13%, and free cash flow of €1.3 billion to €1.5 billion. The company also proposed a dividend of €0.85 per share for 2025.
Philips ended 2025 with €2.79 billion in cash and net debt of €5.29 billion, after paying more than €1 billion to settle U.S. litigation related to its Respironics devices.
