Philips Beats Expectations With €569 Million Profit as SalMar Doubles Operating Earnings
Key Facts
Philips reported adjusted earnings before interest, taxes, depreciation and amortization of €569 million in the third quarter of 2026, up 7.2% year over year and above the average analyst forecast of €522 million, according to data reported by Reuters via Euronext. The company reported group sales of €4.4 billion, with comparable sales growth of 3% and comparable order growth of 8%. After results were released before the Amsterdam market opened, the stock rose 5.6% to €25.90, according to Investing.com coverage attributed to Reuters. SalMar, meanwhile, reported underlying operating profit of 1.61 billion Norwegian kroner, compared with 711 million kroner a year earlier. The company's shares rose more than 2% on Tuesday, despite cutting its harvest outlook for the current year.
Philips attributed the improvement in its profit margin to sales growth, a higher gross margin and productivity measures, partly offset by cost inflation. Adjusted earnings before interest, taxes, depreciation and amortization margin rose 70 basis points to 13.0% in the quarter. The company said the margin improved "mainly due to higher sales and gross margin and productivity measures," while cost inflation limited the gains. Comparable orders also rose 8%, exceeding comparable sales growth of 3%, providing another indication of demand during the period. Philips kept its full-year outlook unchanged, forecasting comparable sales growth of between 3% and 4.5% and an adjusted margin of between 13.5% and 14.0%. It also expects free cash flow of between €1.5 billion and €1.7 billion in 2026.
Philips' net income, however, fell to €28 million in the third quarter from €187 million a year earlier, according to Investing.com. The coverage attributed the decline largely to a provision of €288 million related to a framework agreement with the U.S. Department of Justice concerning investigations related to the Respironics device recall. Philips said it recorded the provision in the third quarter and that the preliminary settlement with the department covers criminal and civil investigations related to the recall. The agreement remains subject to completion of the relevant documentation, while the company expects to pay the amount in the first quarter of 2027. The financial commitment weighs on reported net income despite adjusted earnings exceeding market estimates. The full-year outlook the company maintained continues to include the impact of this matter in its results and expected cash flow.
In aquaculture, SalMar's harvest reached a record 105,100 tons in the third quarter, and operating profit was 15.3 Norwegian kroner per kilogram. The company said the year-over-year improvement benefited from "higher volumes, lower cost levels and better price achievement." It added that its sales and industry segment delivered strong results during the period. Underlying operating profit was 1.61 billion kroner, compared with 711 million in the third quarter of the previous year, according to Investing.com coverage attributed to Reuters. A revaluation of fish inventories also added 721 million kroner to earnings, a gain the company linked to higher expected forward prices. The figures show the contribution of production, costs and prices, alongside the valuation effect, to profit growth.
The third-quarter performance followed operating profit of 1,237 million kroner and a harvest of 81,800 tons in the second quarter of 2026. SalMar said at the time that an unfavorable harvest pattern and lower market prices had negatively affected price achievement. In the third quarter, the increase in harvest to a record level reflected improved volumes compared with the previous period, alongside year-over-year profitability growth. Despite these results, the company cut its 2026 harvest guidance to 347,000 tons, including its proportional share of Scottish Sea Farms. It forecast total harvest of 348,000 tons in 2027, a level it said was equivalent to 2026 volume. The cut to annual guidance puts the record quarterly result in the context of a more cautious production plan for the rest of the year.
SalMar's balance-sheet indicators improved during the quarter, as it reduced net interest-bearing debt by 1,228 million kroner from the end of the second quarter to 17,912 million kroner at the end of the third quarter. Available liquidity stood at 15.9 billion kroner at the end of the period. For the fourth quarter, the company expects slightly lower costs and harvest volumes below those of the same period a year earlier. It also expects the share of sales covered by fixed-price contracts to rise to about 38%, compared with 29% in the third quarter. These expectations outline the operating and pricing conditions the company will face in the final quarter. Actual harvest volume in 2026, along with the path of costs and the share of sales covered by contracts, will be among the key figures in SalMar's next updates.