Siemens Healthineers raised its fiscal year 2025 outlook after reporting stronger-than-expected third-quarter results, boosted by growth in its Varian and imaging businesses despite tariff headwinds.
Amid strong performance in the first nine months of the year, the medical technology company now expects comparable revenue growth of 5.5% to 6%, up from the previous range of 5% to 6%. Adjusted basic earnings per share is forecast to be between EUR 2.30 and EUR 2.45, compared with a prior range of EUR 2.20 to EUR 2.50.
The company’s 2025 outlook also includes a significant change to the estimated impact of American import tariffs on its business after the U.S. framework trade agreement with the European Union, which President Donald Trump struck on Sunday. That deal sets a 15% tariff on European exports to the U.S., down from the 30% import tax Trump had threatened.
During the company’s third quarter earnings call Wednesday, Chief Financial Officer Jochen Schmitz said the company took a 100 million euro ($116 million) hit from tariffs in the latest quarter.
The company estimates a 200 million euro to 250 million euro ($232 million to $290 million) net impact from tariffs through 2025. In May, the company had said it expected a 300 million euro ($348 million) hit in the second half of the year.
For its 2026 fiscal year, the company expects a 400 million euro to 500 million euro ($460 million to $580 million) tariff impact as the “most realistic case,” Schmitz said.
“We will be able to mitigate the full impact over time in the midterm. It’s different than inflation, but you can compare it from a development standpoint like the inflation topic, we will be able to protect our profit pool over time by either price quality and/or value-add structure changes,” Schmitz told investors and analysts on the call.
For the quarter ended June 30, revenue rose 7.6% on a comparable basis to 5.7 billion euro ($6.4 billion), from 5.4 billion euro ($6.2 billion) in the prior-year period. Net income grew 18% to 556 million euro ($638 million).
“When considering the current geopolitical and macroeconomic context, our results underscore the resilience of our business. As a global leader, we might not be immune to tariffs in the short term, but we are well harnessed thanks to our unique capabilities. I would go so far to call these unique capabilities superpowers,” Bernhard Montag, president and CEO of Siemens Healthineers, said during the call. “We continue strengthening this power by innovating in each capability in patient twinning; in precision therapy; and in digital, data and AI.”
The company’s imaging business reported nearly 12% revenue growth and its cancer care tech company, Varian Medical Systems, reported 8.7% comparable revenue growth.
“While these strong growth rates feel almost 'normal' for Varian, the recovery of the margin compared to Q2 is indeed noteworthy," Montag said. "The strong 18.8% margin has clearly brought the segment back on track."
Advanced Therapies’ revenue in the quarter grew 4.5%. Diagnostics revenue dropped 0.6%.
Siemens Healthineers' medtech peer Philips also cut its estimated tariff impact for the year following the U.S.-E.U. trade deal.
The Dutch company said Tuesday it now expects the impact from tariffs to cost between 150 million euros and 200 million euros ($174 million to $232 million) in 2025, down approximately 100 million euros from the previous estimate. In May, the company said it expected tariffs to cost between 250 million euros and 300 million euros ($290 million and $348 million).
Philips said it was increasing its adjusted earnings margin range by a half-point, to a range of 11.3% to 11.8%, which is 50 basis points above its May outlook, Charlotte Hanneman, executive VP and CFO, said during the company’s fiscal Q2 earnings call Tuesday.
“We did what we said we would do in the first half of the year and remain on track," Roy Jakobs, CEO of Royal Philips, said in a statement. "We increase our full year outlook for margin and free cash flow, including currently announced tariff levels, and we reiterate our comparable sales growth outlook as we continue to build order and sales momentum."
Hanneman said Philips has taken steps to mitigate the short-term impacts of the tariffs, such as optimizing inventory locations and flow of goods, leveraging special programs and pursuing exceptions.
“We made solid progress on midterm initiatives, including supplier network and manufacturing location optimization to enhance cost efficiency and operational agility. This process is carefully managed to balance regulatory, operational and customer considerations,” she told investors on the call.
Sales in the second quarter fell by 3% to 4.3 billion euros ($4.9 billion). Philips is projecting at least 1% revenue growth for the full year.