Philips Settles US Economic Loss Claims Over Sleep, Respiratory Device Recall
Portfolio Pulse from Vandana Singh
Royal Philips (NYSE:PHG) has agreed to resolve all economic loss claims related to its voluntary recall of certain sleep and respiratory care devices manufactured by its subsidiary, Philips Respironics. The settlement terms, subject to court approval, include predefined cash awards for eligible participants and extended warranties on all replacement devices. Philips Respironics recorded a provision of €575 million in Q1 of 2023 to cover the estimated costs of the final settlement. Payments to class members are not expected to commence until at least Q1 2024.
September 07, 2023 | 6:40 pm
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Philips has agreed to a settlement over its device recall, which includes cash awards and extended warranties. The company has recorded a provision of €575 million to cover the costs, and payments are expected to start from Q1 2024.
The settlement of the economic loss claims related to the device recall is a significant financial commitment for Philips. The provision of €575 million recorded to cover the costs indicates a substantial financial impact. This, combined with the fact that the payments are not expected to commence until at least Q1 2024, could create uncertainty among investors, potentially negatively impacting the stock price in the short term.
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