Dutch health technology company Philips reported a second-quarter net profit of 386 million euros on July 28, 2026.
The result was boosted by a 186 million euro refund from mistakenly paid United States import tariffs.
The company's quarterly revenue rose 4% year-over-year to 4.4 billion euros. This beat analysts' core profit margin expectations.
The windfall stems from a US Supreme Court ruling in February.
The ruling invalidated import tariffs levied on dozens of countries last year, allowing affected companies to submit reimbursement claims.
Chief Executive Officer Roy Jakobs explained that the company moved quickly to claim the funds.
"We started the procedure as soon as we could, which is why we are also among the first to have received the money back," said Jakobs.
While Philips received the bulk of the refunded sum, the US introduced new tariffs last week.
Jakobs described this as part of a new reality with little likelihood of being overturned.
Market Impact and China Headwinds
US-listed shares of Philips fell 4.4% to $25.02 on Monday.
Traders anticipated a 3% to 5% drop for Amsterdam-listed shares due to a 1% decline in comparable order intake and ongoing sales pressure in China.
Despite strong product demand in Europe that led Philips to raise its full-year profit forecast, order growth was impacted by delays in signing large US contracts.
"That is not a setback, but rather a timing issue," said Jakobs.
Jakobs noted that these major long-term agreements involve hundreds of millions of dollars. "Some of these deals are volatile.
They are of very large size — contracts of hundreds of millions or millions of dollars, over multiple years — and therefore you cannot pinpoint exactly when they will be finalized," said Jakobs.
Analysts from RBC pointed out that lower demand and operational headwinds in China weighed heavily on second-quarter sales growth.
China implemented a policy in July requiring all public medical institutions to purchase equipment through centralized procurement programs, creating market disruption.
"We have seen that this has caused a kind of market disruption and contraction," said Jakobs.
The company confirmed it had already factored these ongoing challenges into its financial planning.
"We foresee a structurally more challenging situation in China, which we had taken into account," said Jakobs.
