Philips Posts Earnings in Q4, Revenues Increase Y/Y, Shares Dip

Koninklijke Philips PHG reported fourth-quarter 2025 earnings of €0.41 per share. The company reported a loss of €0.35 per share in the year-ago quarter.

The company’s sales increased 1.1% on a year-over-year basis to €5.09 billion. Comparable sales increased 7% year over year, which was driven by growth across all segments. The Diagnosis & Treatment segment recorded 4% growth, Connected Care recorded 7% growth, and Personal Health showed 14% growth.

Further, Philips’ comparable order intake increased 7% year over year in the fourth quarter.

Sales increased 7% year over year on a comparable basis in growth geographies. Growth geographies showed 15% growth, mainly driven by Personal Health. Comparable sales in Mature geographies grew 4% in the reported quarter, mainly driven by North America and with strong contribution from Connected Care.

Koninklijke Philips N.V. Price, Consensus and EPS Surprise

Koninklijke Philips N.V. price-consensus-eps-surprise-chart | Koninklijke Philips N.V. Quote

Philips’ stock lost 3.46% in pre-market trading.

PHG’s Segmental Update

Diagnosis & Treatment revenues declined 2% from the year-ago quarter to €2.40 billion. Comparable sales increased 4% year over year. Image Guided Therapy showed double-digit growth, while Precision Diagnosis was flat.

Connected Care revenues were in line year over year at €1.42 billion. Comparable sales increased 7% year over year, mainly due to double-digit growth in Monitoring and mid-single-digit growth in Enterprise Informatics.

Personal Health revenues grew 9% year over year to €1.11 billion. Comparable sales increased 14% year over year, driven by double-digit growth in Growth geographies and mid-single-digit growth in Mature geographies. 

Other segment sales amounted to €155 million, up 2.6% on a year-over-year basis.

PHG’s Operating Details

Gross margin contracted 600 basis points (bps) on a year-over-year basis to 44.9% in the reported quarter.

General & administrative expenses, as a percentage of sales, were 15.3%, which expanded 40 bps on a year-over-year basis. Moreover, selling expenses decreased 100 bps year over year to 22.5%. Research & development expenses decreased 100 bps to 8.4%.

Restructuring, acquisition-related, and other items amounted to a loss of €179 million compared with €286 million a year ago. 

Philips remains on track to deliver its three-year €2.5 billion productivity program, including €0.8 billion in savings in 2025.

Phillips adjusted EBITA — the company’s preferred measure of operational performance — increased 13.4% year over year to €770 million. EBITA margin expanded 160 bps on a year-over-year basis to 15.1% in the reported quarter.

Diagnosis & Treatment’s adjusted EBITA margin contracted 30 bps on a year-over-year basis to 11.8%.

Connected Care’s adjusted EBITA margin was 16.5% in the reported quarter, which expanded 150 bps year over year.

Personal Health’s adjusted EBITA margin contracted 500 bps on a year-over-year basis to 23%.

PHG’s Balance Sheet

As of Dec. 31, 2025, Philips’ cash and cash equivalents were €2.40 billion compared with €1.91 billion as of Sept. 30, 2025. 

Total debt was €8.084 billion compared with €8.385 billion as of Sept. 30, 2025.

Operating cash flow was €1.39 billion compared with the year-ago quarter’s €1.45 billion.

In the quarter under review, free cash flow was €1.2 billion compared with the year-ago quarter’s €1.28 billion.

PHG Initiates 2026 Guidance

Philips expects to deliver 3%-4.5% of comparable sales growth.

Further, the adjusted EBITA margin is expected to be between 12.5% and 13%.

Free cash flow is expected to be between €1.3 billion and €1.5 billion in 2026.

PHG’s Zacks Rank & Stocks to Consider

Philips currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices ADI, Applied Materials AMAT, and MKS MKSI. While MKSI sports a Zacks Rank #1 (Strong Buy), Analog Devices and Applied Materials carry a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices’ shares have gained 60.3% in the past 12-month period. Analog Devices is scheduled to release first-quarter fiscal 2026 results on Feb. 18, 2026.

Applied Materials shares have returned 79.8% in the past 12-month period. AMAT is scheduled to release its first-quarter fiscal 2026 results on Feb. 12, 2026. 

MKS shares have gained 127.7% in the past 12-month period. MKS is set to report its fourth-quarter 2025 results on Feb. 17, 2026.

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