On July 29, 2021, the Philips office building in Warsaw, Poland.
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Philips The Dutch medical equipment giant soared to a two-year high on Monday after it agreed to a $1.1 billion settlement in the U.S. in personal injury cases related to its recall of some sleep apnea equipment.
Millions of devices were recalled in 2021 due to concerns about potential cancer risks from components. As of 9:00 am London time, Philips shares were up 33%.
The company said it had set aside 982 million euros ($1.1 billion) to cover personal injury and medical monitoring claims, adding that the settlement would end uncertainty over the company’s litigation. The company said it does not admit any fault or liability or admit that any injuries were caused by its Respironics equipment.
“Patient safety and quality are our top priorities and we have taken important steps to further address the consequences of the Respironics recall,” Philips CEO Roy Jakobs said in a statement.
“Repair work on the patient’s sleep therapy devices is nearing completion and test results to date indicate that use of the devices is not expected to cause significant harm to health. We regret the concerns patients may experience.”
Barclays analyst Hassan Al-Wakeel said provisions were lower than expected by 2 to 4 billion euros. He added that in the worst-case scenario, there were fears of a loss of 10 billion euros.
Alva Kiel said in a report on Monday that the settlement “is capped and ends the uncertainty of the litigation.”
September, Philips Financial loss claim settled The United States has set aside 575 million euros ($615.7 million) in provisions related to the recall.
Monday’s rebound brought Philips shares back to their highest levels since April 2022.
The company also reported a first-quarter loss of 998 million euros ($1.07 billion) on Monday. Meanwhile, adjusted earnings exceeded analysts’ consensus expectations, with earnings for the quarter coming in at 388 million euros, according to Reuters.
Sales in the first quarter were slightly lower than the same period last year, at 4.14 billion euros, compared with 4.17 billion euros in 2023.
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