Philips shares plunge after profit warning

Philips shares plunged Wednesday (January 12) after it warned on earnings.

The stock was down over 11% in early trades.

Philips said profits would be down about 40% in the fourth quarter.

It's being hit by supply-chain problems including port congestion and a shortage of electronic components.

That has forced it to delay installing some hospital equipment, and was one factor behind a 10% drop in sales over the period.

Chief Executive Frans van Houten says the logistics problems won't ease any time soon, and called it a "difficult situation".

Philips also faces fallout from a massive recall of its hospital ventilators and respiratory devices.

It has to replace several million of the products worldwide.

That's because of a foam part that might degrade and become toxic.

On Wednesday (January 12) the firm said it had set aside more money to cover the costs of the recall.

It also faces numerous class-action lawsuits.

Before Wednesday's tumble, Philips shares had already fallen around a third since it announced the recall in April last year.

The company will publish full results later in January.

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