Philips CEO says US order delays, China pressure weighed on Q2 results

By Lucie Barbier and Alessandro Parodi

July 28 (Reuters) - The chief executive of Philips said on Tuesday that delayed orders in the U.S. and market pressure in China weighed on the healthcare tech group's second-quarter results, even as it lifted its margin outlook for the full year.

The Dutch maker of consumer electronics, appliances and medical equipment on Monday reported a quarterly core profit margin above analysts' expectations thanks to U.S. tariff refunds, but its comparable order intake fell 1% because certain large orders were shifted into the third quarter.

Philips' U.S.-listed shares fell 4.4% to $25.02 on Monday, while traders indicated a 3% to 5% fall in the Amsterdam-listed shares before the bell.

"That's not a miss, but rather a timing issue," CEO Roy Jakobs told journalists. "Some of these deals are lumpy. They are very large in nature — multi-hundred-million or multi-million, multi-year contracts — and therefore you cannot exactly pinpoint when they will close."

Analysts at RBC also noted that continued pressure in China affected second-quarter sales growth.

China announced in July a new policy requiring all public medical institutions to buy medical equipment through centralized procurement programs.

"We have seen that this has caused a kind of market turmoil and degrowth," Jakobs said on the press call. "We foresee a more structurally challenging situation in China, which we had planned for." 

(Reporting by Lucie Barbier and Alessandro Parodi, editing by Milla Nissi-Prussak)