Dutch medical equipment maker Philips has posted a bigger-than-expected drop in second-quarter core earnings, saying supply shortages and lockdowns in China dented sales.

The company cut its estimate for full-year sales growth to 1%-3% from 3%-5%, forecasting a second-half growth of 6%-9% on the back of a strong order book.

Adjusted earnings before interest, taxes and amortisation (EBITA) came in at €216 million for the three months ended June 30.

Analysts were expecting €324 million, according to a company-compiled poll.

In the same period a year earlier, Philips had adjusted EBITA of €532 million.

Sales fell 7% to €4.17 billion, also missing analyst forecasts of €4.23 billion.

Philips, once known as a consumer electronics company, now does most of its business making medical imaging, monitoring and diagnostic equipment, striking deals with big hospitals.

Chief Executive Officer Frans van Houten said supply shortages and inflationary pressures had played a role, but singled out Chinese pandemic lockdowns as causing pain.

In China, "comparable sales and order intake declined almost 30% in the quarter", he said in a statement.

"Production in several of our factories, as well as those of our suppliers in China, was suspended for two months, which exacerbated the global supply chain and cost challenges," he added.

Philips shares, which are down 34% so far this year, closed at €31.75 on Friday.

In 2021, the company was raided by the US Food and Drug Administration (FDA) and forced to recall millions of ventilators and respiratory devices because of a toxic foam part.

Philips said it was in talks with the FBI, on behalf of the FDA, on the terms of a settlement.

Total costs from the recall so far amount to about €900 million.

That sum does not cover possible litigation costs from class action suits.