Philips revives bold US tariff bill

Philips Shares Surge After Revised US Tariff Impact

Shares in Philips jumped more than 10 % in morning trading after the company announced that the cost of U.S. tariffs would be significantly lower than it originally feared.

Key Developments

• Phillips originally estimated in April that U.S. tariffs could cost it €250‑€300 m this year.
• Brussels and Washington reached a deal that will reduce the baseline U.S. tariff on EU goods to 15 %.
• The company now expects the impact to be between €150‑€200 m.
• Chief executive Roy Jakobs said the guidance update reflects newfound certainty around the EU‑U.S. trade agreement.
• Philips still targets a 1‑3 % increase in annual sales.

Financial Performance

The second‑quarter net profit fell 47 % to €240 m, but last year’s performance was boosted by exceptional income from insurance payouts linked to long‑running issues with its sleep apnea machines. Sales slid 2.8 % to €4.3 bn, although they edged higher on a comparable basis that excludes currency changes. Orders rose by 6 % on a comparable basis.

Context

Long known for light bulbs and television sets, the Dutch company has refocused its business toward medical equipment. The U.S. tariff deal has come under criticism in Europe as being lopsided, saddling its manufacturers with a costly 15 % rate with little in return from the U.S. as certainty remains a relative concept given President Trump’s propensity to change positions.