United States halts order of Philips ventilators, earnings to be hit

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Electrical equipment maker Philips on Monday said the U.S. Department of Health had cancelled the bulk of an order for 43,000 hospital ...

AMSTERDAM: Electrical equipment maker Philips on Monday said the US Department of Health had cancelled the bulk of an order for 43,000 hospital ventilators, leading it to cut its 2020 earnings outlook.

The company said it had been informed by the US Department of Health and Human Services of the partial termination of the contract. Philips will not ship a remaining 30,700 ventilators, it said in a statement. "The reduction in our ventilator deliveries to HHS will obviously impact Philips’ financial performance, but we continue to expect to return to growth and improved profitability in the second half of the year, starting in the third quarter," Frans van Houten, Philips chief executive, said.Philips had said in July that the surge in orders for medical equipment would enable it to achieve an"adjusted EBITA margin improvement" this year.

 

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