Philips beats forecasts, but recall costs weigh

Philips beat forecasts in the second quarter.

On Monday (July 26) the healthcare giant posted core earnings of 532 million euros - or about $626 million.

It was boosted by its personal health and diagnostics businesses.

But the Dutch firm faces mounting costs to repair and replace faulty ventilators and breathing devices.

Back in June it said around 4 million products needed fixing.

Philips said the devices contained a foam part that could degrade and become toxic.

It's now set aside a total of about $590 million to cover the problem.

In a call with reporters, Chief Executive Frans van Houten said the company was producing replacement and repair kits.

But it could take 12 months to deal with all the affected appliances.

Philips is gathering evidence on the risks posed by the equipment before expected class action suits come to court.

On Monday the company confirmed its 2021 sales growth forecast, but narrowed its profit outlook to the lower end of its previous range.

Philips shares were down around 5% by lunchtime on Monday.

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