Dutch medical device maker Philips said Monday its orders rebounded in the second quarter and it will receive insurance payments of more than 500 million euros as it recovers from a crisis over faulty sleep machines.
Philips reached a $1.1 billion deal in April to settle lawsuits in the United States over the DreamStation machines for sleep apnoea, a disorder in which breathing intermittently stops during sleep.
The crisis erupted in 2021, with millions of devices recalled over concerns that users were at risk of inhaling pieces of noise-cancelling foam and fears it could potentially cause cancer.
Philips said Monday it would received 538 million euros ($583 million) in insurance payments related to the liability claims over the sleep machines made by subsidiary Philips Respironics.
The payout helped its income from operations jump 18 per cent to 816 million euros in the second quarter.
The group said its order intake for its products rose nine per cent in the quarter after dropping eight per cent over the same period last year.
鈥業鈥檓 encouraged by our return to order intake growth this quarter, primarily driven by North America,鈥� chief executive Roy Jakobs said.
鈥楶atient safety remains our number one priority,鈥� he added.
Philips noted that ratings agencies upped its credit ratings outlook from 鈥榥egative鈥� to 鈥榮table鈥�.
S&P Global in early July said it anticipated Philips to 鈥榠mprove its operating performance over the next 12-24 months on the back of its recovering order book and stringent cost focus.鈥�
鈥業n our view, the settlement agreement for its personal injury and medical monitoring claims diminished future uncertainty and improved earnings stability,鈥� S&P Global added.
Philips said it expected sales to rise between three to five per cent for the full year and free cash flow of up to 1.1 billion euros.
But it warned that 鈥榯he outlook excludes the potential impact of the ongoing Respironics-related legal proceedings, including the investigation by the US Department of Justice.鈥�