Koninklijke Philips has stopped selling its CPAP machine, used to treat sleep apnea, in the U.S., the company said as part of its fourth-quarter earnings announcement Monday. The Q4 report included details on an agreement with the U.S. Food and Drug Administration over the recalled machines.
Philips had sold millions of its Respironics breathing device/ventilators to sleep apnea patients in the U.S. The continuous positive airway pressure devices are referred to as CPAP machines.
Unless cleaned properly, deterioration of foam components in the devices were found to lead to a potential toxic threat. The company said Monday that no new devices would be sold until the problem is remedied.
A consent decree finalized with the FDA would be submitted to the U.S. courts for approval, the company said. It gave no timeline for the decree or as to when the devices might again be available for sale.
Fallout from the faulty machines helped spur the company's 7,500 job cuts in 2023. The company is still selling the machines outside the U.S., and will continue to service and provide parts for existing U.S. machines, it said.
A statement from CEO Roy Jakobs said, "Resolving the consequences of the Respironics recall for our patients and customers is a key focus area and I acknowledge and apologize for the distress and concern caused. We are fully committed to complying with the consent decree, which is an important step and provides a clear path forward."
CPAP Machine Problems Affect 2023 Results
The company reported a provision of $393.5 million related to the agreement. The company set aside more than $620 million for CPAP-machine-related cases in the first quarter of 2023. It still faces numerous lawsuits from sleep apnea patients claiming damages.
The diversified Netherlands-based outfit is a leader in medical imaging equipment. The company reported adjusted earnings of 44 cents a share, a penny above year-ago levels and below views for 58 cents. Revenue for the quarter was $5.45 billion, vs. views for $5.88 billion, according to FactSet.
Shares of the CPAP machine maker dropped 8% in early trade Monday, before paring losses to near 5%. Shares are down about 8% so far in January, and up 91% from a November low.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Learning How To Pick Great Stocks? Read Investor's Corner
MarketSmith: Research, Charts, Data And Coaching All In One Place
