On November 3, 2026, Philips announced a preliminary agreement with the US Department of Justice to settle criminal and civil investigations into its 2021 global sleep apnoea device recall. The company set aside a €288 million provision for Q3 2026, pushing net profit down to €28 million despite beating core profit targets with €569 million in adjusted EBITA. Following the announcement, Philips shares surged over 6% in Amsterdam.
DOJ settlement agreement
- ▪Philips did not disclose whether its preliminary settlement agreement with the US Department of Justice includes an admission of wrongdoing.
- ▪Philips reached an agreement in principle with the US Department of Justice to resolve criminal and civil investigations into its Respironics sleep device recall
- ▪Philips set aside a provision of 288 million euros ($322 million) in Q3 2026 for the preliminary US Department of Justice settlement, with payment expected in Q1 2027.
Stock market reaction
- ▪Philips shares rose over 6% at the opening bell on the Amsterdam Stock Exchange on November 3, 2026 following the announcement of the preliminary DOJ settlement.
- ▪The price of Philips stock rose despite the broader Amsterdam AEX index dropping 0,7% during early trading on November 3, 2026.
Q3 financial results and outlook
- ▪Philips' net profit fell to 28 million euros in Q3 2026, down from 187 million euros in Q3 2025, due to the 288 million euro settlement provision.
- ▪Philips reported Q3 2026 sales of 4.39 billion euros, representing a 3% comparable sales growth, while order intake rose by 8% driven by its Diagnostics and Treatment division.
- ▪Philips maintained its full-year 2026 sales growth outlook of between 3.0% and 4.5%.
- ▪Philips reported a 7.2% rise in Q3 2026 adjusted EBITA to 569 million euros ($637 million), surpassing analyst forecasts of 522 million euros.
State attorneys general investigation
- ▪Philips is engaged in ongoing discussions regarding a separate investigation by US state attorneys general into its device recall, but has not booked a financial provision for it.
- ▪Philips' financial targets for 2026 exclude potential liabilities from ongoing proceedings related to its Respironics unit, including the investigation by US state attorneys general.
Sleep device recall risks
- ▪Philips initiated a global recall in 2021 for millions of DreamStation sleep apnoea machines due to sound-reducing foam degradation risks that posed toxic and potential cancer hazards.
- ▪Some models of Philips' recalled sleep apnoea devices could also stop functioning intermittently.
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