Philips Lifts Margin Outlook After Getting US Tariff Refund

The Royal Philips NV logo.

Royal Philips NV raised its profitability expectations for 2026 after a US tariff refund bolstered earnings in the second quarter.

The Dutch company, which makes a wide range of products from ultrasound scanners to electric toothbrushes, now sees an adjusted Ebita margin of at least 13.5% for the full year, from at least 12.5% previously.

Its margin in the three months through June, excluding the refund, came in at 12.2%, slightly higher than analyst expectations compiled by Bloomberg. Chief Executive Officer Roy Jakobs cited strong order growth in Europe, while flagging that large Connected Care orders shifted to the third quarter, depressing overall order intake.

The manufacturer has been trying to become more efficient to offset the duties and higher costs for freight, energy and plastics caused by the fighting in the Middle East. Chief Financial Officer Charlotte Hanneman told Bloomberg earlier this month that Philips was “looking at selective pricing if and when it makes sense.”

The supply of Helium, a gas used in many of the medical scanners made by Philips and its peers, has been squeezed after China temporarily banned exports. Its price has climbed after the Iran war disrupted shipping in the Strait of Hormuz.

Demand in the key China market has stayed challenging after the Asian nation implemented a sweeping anti-corruption campaign across the healthcare sector and implemented strict domestic product requirements for many categories. Philips reported declining second-quarter sales in China at the Diagnosis and Treatment division, its largest unit that makes CT, ultrasound and MRI scanners.

Philips continues to “actively manage the broader macro environment, including inflation,” Jakobs said in the statement. “Our productivity program is on track, helping to largely offset these pressures.”