What happened

Shares of Dutch electronics veteran Philips (NYSE:PHG) fell as much as 9.7% on Monday morning following the release of disappointing third-quarter results. By 11:40 a.m. EDT, the stock had recovered slightly to a 9% drop.

A businessman, sitting at his desk with coffee and a laptop, lifts his glasses to rub his tired eyes.

Image source: Getty Images.

So what

Philips' third-quarter sales rose 3.8% year over year in local currencies, landing at $4.94 billion. Accounting for the euro's falling exchange rates, dollar-to-dollar growth would shrink to 1.1% when using historical euro-to-dollar rates for the 2017 report.

Earnings fell 6% to $0.35 per share, while adjusted EBITA profits -- an alternative cash flow metric that Philips has relied on for many years -- rose 9% to $651 million, all in constant currencies.

European analysts had been looking for EBITA profits of roughly $670 million on top-line sales in the neighborhood of $5.0 billion. Comparable sales grew 4% above the year-ago period, again short of analysts' 5.4% expectations.

Now what

On the upside, Philips' management simply reaffirmed its full-year financial targets, which suggests an upturn in the fourth quarter's early going. Incoming order volumes also rose 11% in the third quarter, pointing to beefier revenues in the near future.

Putting it all together, Philips' share price move today looks like a knee-jerk overreaction to short-lived issues. If I'm reading these tea leaves correctly, I wouldn't be surprised to see the stock gaining back these losses in three months.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.