Amsterdam (Netherlands) (AFP) – Dutch electronics and medical device manufacturer Philips said Tuesday it had reached a deal “in principle” with US authorities to settle a long-running case over faulty sleep machines. The company has for years been weighed down by a series of crises over the recall of its DreamStation machines for sleep apnoea, a disorder in which breathing stops and starts during sleep. Millions of devices were recalled over concerns that users were at risk of inhaling pieces of noise-cancelling foam and fears it could potentially cause cancer.
Presenting its third-quarter results, the Dutch firm said it had “reached an agreement in principle with the US Department of Justice to resolve the previously disclosed criminal and civil investigations related to the…recall.” The company set aside 288 million euros ($322 million) in the third quarter of this year to settle the case, with payment expected in the first quarter of 2027. “The settlement is subject to finalisation of the relevant documentation,” said Philips. The provision pushed down the company’s third-quarter profits to 28 million euros, compared to 187 million euros in the same period of last year.
Chief executive officer Roy Jakobs told reporters the deal was clinched “in the last few days,” but declined to give further details while the paperwork was being finalised. “It’s for sure an important milestone for us as it marks a step forward in resolving the sleep and respiratory care related proceedings,” he said.
Once famous for making lightbulbs and televisions among other products, Amsterdam-based Philips in recent years has sold off subsidiaries to focus on medical care technology. The firm recorded quarterly turnover of 4.4 billion euros, compared to 4.3 billion euros in the third quarter of 2025. Philips maintained its forecast of sales growth over the full year of between 3.0 and 4.5 percent.
“We delivered a strong third quarter,” said Jakobs. “We see our customers responding well to our latest AI-enabled innovations,” added the CEO. In February, Philips posted its first annual profit after three straight years of losses, turning in a better-than-expected gain of 897 million euros. In the second quarter of this year, the firm reported net profits of 386 million euros, helped by a refund from US tariffs later struck down by the US Supreme Court.
Jakobs painted a bright outlook for the firm. “Our year-to-date results, together with our strong order book, give us confidence in delivering our full-year outlook and achieving our medium-term ambitions,” said the executive.
© 2024 AFP
