Royal Philips exceeded expectations in the second quarter, supported by insurance income related to its sleep apnea devices, while order intake turned positive for the first time in two years. This news caused the shares of the Dutch health technology company to rise by 10% to €26.21 in early trading.

The company announced that revenue in the second quarter fell to 4.46 billion euros, compared to 4.47 billion euros in the same period last year, but on a comparable basis increased by 2%. Adjusted earnings before interest, taxes, and amortization (EBITA) rose to 495 million euros, compared to 453 million euros in the previous year, primarily due to the diagnostic and treatment systems business. The adjusted EBITA margin increased to 11.1% from 10.1% across all segments, attributed to the productivity program and cost savings.

Analysts had expected an adjusted EBITA of 433 million euros with a revenue of 4.45 billion euros, according to a consensus estimate compiled by Philips.

The net profit in the second quarter increased to 451 million euros, compared to 72 million euros in the same period last year, exceeding consensus expectations of 438 million euros. This was due to higher earnings and insurance income related to liability claims for sleep apnea devices, which were partially offset by higher tax expenses.

The better-than-expected results in the second quarter drove Philips' stock price up by 10% to €26.21 in early trading on Monday. The stock has gained 26% since the beginning of the year, reaching a high of €28.14 on April 29, after the company reached a $1.1 billion settlement in the US related to allegedly defective Respironics ventilators. "Philips has room to regain market share, but this could take years due to reputational damage, an uncertain pricing strategy, and increased competition," Jefferies analysts wrote in a note to clients. The Jefferies analysts estimate the resumption of sales of sleep devices in early 2026.

The comparable order intake increased by 9% year-over-year in the second quarter, primarily driven by North America, which offset continued subdued demand in China.

The company reaffirmed its forecast for the full year, expecting comparable sales growth of 3% to 5%, an adjusted EBITA margin in the range of 11% to 11.5%, and free cash flow of 0.9 to 1.1 billion euros.