06:42 AM EDT, 10/28/2024 (MT Newswires) -- Royal Philips' (PHG) US-listed shares dropped early Monday after the Dutch health technology firm cut its full-year comparable sales growth outlook amid a substantial drop in demand in China, while the company's third-quarter earnings remained flat year over year.

Philips now expects comparable sales to increase between 0.5% and 1.5% for 2024, down from its previous growth projections of 3% to 5%, due to "significant deterioration" in China demand. The uncertainties highlighted by the company in earlier quarters have "intensified" in the country and are anticipated to continue, it said. Outside of China, comparable sales growth is forecast to remain within the prior guidance range, according to the firm.

"In the (third) quarter, demand from hospitals and consumers in China further deteriorated, while we continue to see solid growth in other regions," Chief Executive Roy Jakobs said in a Monday statement. "We have adjusted our full-year sales outlook to reflect the continued impact from China."

The company's shares on the New York Stock Exchange tumbled 17% in premarket activity.

For the three-month period ended September, Philips reported adjusted earnings of 0.32 euro ($0.35) per share, unchanged from the year before. Sales declined to 4.38 billion euros from 4.47 billion euros in the prior-year quarter, while four analysts surveyed by Capital IQ expected 4.53 billion euros.

Comparable sales were flat for the quarter, down from an 11% rise in the prior-year period. Same-store sales decreased 1% in the diagnosis and treatment segment and 5% in the personal health division, compared with gains last year. Connected care comparable sales were flat.

"Within a challenging macro environment, we remain focused on successfully executing our three-year plan to fully capture growth and margin expansion opportunities," according to Jakobs. Philips said China "remains a fundamentally attractive growth market" for the company in the long term.

The firm estimates its adjusted earnings before interest, taxes and amortization margin to be at the upper end of its initial outlook, at around 11.5%, for the current year, while free cash flow is expected to total 900 million euros, the lower end of its original outlook. In the third quarter, adjusted EBITA margin as a percentage of sales came in at 11.8%, while free cash flow stood at 22 million euros.

Price: 26.51, Change: -5.16, Percent Change: -16.29