Abstract
Royal Philips NV will report Q1 2026 results on February 10, 2026 Pre-Market, with consensus pointing to softer revenue and earnings amid margin resilience and focused execution in core businesses.
Market Forecast
For the current quarter, market projections indicate revenue of USD 5.02 billion, EBIT of USD 0.55 billion, and adjusted EPS of USD 0.46, with year-over-year forecasts of revenue at -1.83%, EBIT at -14.15%, and EPS at -11.77%. The company’s net profit outlook implies softer profitability against challenging comparables, while gross margin stability is expected to anchor the narrative; management targets steady gross profit margin performance and adjusted EPS consistent with operational discipline, though both are forecast to decline year over year. Its main businesses—Diagnosis & Treatment and Connected Care—are expected to continue driving top-line contributions with stability across capital equipment and informatics, while Personal Health faces mixed demand. The most promising segment is Diagnosis & Treatment, supported by an estimated revenue mix contribution of USD 8.79 billion in the last reported period and improving order conversion trends, with year-over-year growth influenced by capital equipment replacement cycles; revenue in this segment remains a key driver for medium-term performance.
Last Quarter Review
Royal Philips NV reported last quarter revenue of USD 4.30 billion, a gross profit margin of 44.40%, GAAP net profit attributable to the parent company of USD 0.18 billion, a net profit margin of 4.28%, and adjusted EPS of USD 0.36, with year-over-year growth of adjusted EPS at 12.50% and revenue at -1.71%. A key highlight was EBIT of USD 0.53 billion, surpassing prior estimates, reflecting cost control and mix improvement despite a modest revenue decline. Main business highlights included Diagnosis & Treatment revenue of USD 8.79 billion and Connected Care revenue of USD 5.13 billion, underpinning the mix, with Personal Health at USD 3.49 billion; year-over-year growth across the portfolio was mixed and affected by capital budget timing and consumer demand variability.
Current Quarter Outlook
Diagnosis & Treatment
Diagnosis & Treatment remains the central pillar for revenue and operating leverage this quarter. The segment’s performance is tied to hospital capital expenditure cycles in imaging and image-guided therapy, where backlog conversion and system installations drive near-term revenue recognition. Growth drivers include multi-year digitalization projects, replacement demand for high-end imaging, and cross-selling of software and services that lift margin mix. Risks center on elongated procurement cycles, policy-driven budget constraints across the United States and Europe, and delivery timing that can shift revenue between quarters. Given the forecast decline in EBIT and EPS, steady gross margin execution in this segment is pivotal to offset headwinds, and the company’s operational measures—pricing discipline, supply chain normalization, and services attachment—are expected to be the levers to stabilize profitability.
Connected Care
Connected Care’s trajectory hinges on enterprise monitoring and informatics deployments, where large contracts translate into phased revenue recognition. The business benefits from demand for patient monitoring refreshes and telehealth-related solutions, though macro budgeting and hospital staffing dynamics may affect timelines. The segment’s margin profile should be supported by software-rich sales, yet the quarter’s EPS and EBIT forecasts suggest the portfolio will absorb some pressure from a normalizing backlog and competitive pricing. Execution focus remains on converting contracted orders efficiently, maintaining service-level resilience, and expanding recurring revenue footprints, which can support blended gross margins even if revenue growth is subdued year over year.
Personal Health
Personal Health exhibits mixed demand patterns driven by discretionary consumer spending across oral care and domestic appliances, with promotional calendars and channel inventory dynamics influencing quarterly flow. The shift toward value-oriented price points and tighter retail inventory management can weigh on growth, but margin resilience stems from product mix and cost efficiencies. Given the overall forecast for lower EPS and EBIT, this segment will likely contribute stability rather than outsized growth, helping to balance the enterprise with cash generation and operational flexibility to invest in higher-return clinical businesses. Monitoring sell-through vs. sell-in alignment and pricing actions is important for near-term stock performance.
Stock Price Drivers This Quarter
The stock’s reaction will be driven by the interplay of revenue trajectory versus margin quality and any surprises in adjusted EPS versus consensus. Delivery timing in Diagnosis & Treatment and Connected Care order conversion will be closely watched, as will commentary on backlog, pricing, and supply chain costs. Investors will also parse the outlook statement for fiscal-year guidance implications, particularly how management frames gross margin durability and EBIT progression after this quarter’s forecasted year-over-year declines. A beat on EPS or visible gross margin resilience around 44.40% could recalibrate sentiment positively, while weaker conversion or a sharper decline in EBIT would likely reinforce caution.
Analyst Opinions
Across recent institutional commentary, the prevailing stance is cautiously bullish, emphasizing margin stabilization and disciplined execution despite a soft revenue backdrop. Analysts highlight the better-than-expected EBIT in the last quarter and sustained gross margin performance as supportive factors for the near term, while acknowledging year-over-year declines in consensus projections for EPS and EBIT in the current quarter. The cautious optimism rests on the company’s backlog conversion, pricing initiatives, and services attach rates in Diagnosis & Treatment and Connected Care, which are expected to underpin profitability even as revenues face modest headwinds. The bullish majority sees risk-balanced delivery, with potential for an EPS beat if operational efficiencies continue and revenue timing aligns favorably within the quarter.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments