Royal Philips NV tumbled the most in 12 months after the Dutch provider of hospital equipment warned it will miss profit goals because of higher tariffs and continuing challenges with its Connected Care division.

Shares of the Amsterdam-based company fell as much as 9.7% on Thursday. Margin improvement for 2019 will be a maximum 20 basis points, snapping three straight years of 100 basis-point improvements, the company said in a statement.

The issues threaten a push by Chief Executive Officer Frans van Houten to improve productivity, after he streamlined Philips to focus on health products. Van Houten pledged to step up efforts to improve the performance of the Connected Care business, which supplies wireless gear and monitors.

Philips also reported third-quarter profit that missed estimates as it lowered production to reduce unsold inventory.

Earnings before interest, taxes and amortization is expected to be about 583 million euros ($640 million), with profitability of about 12.4% of sales, down from 13.2% a year earlier, Philips said. Analysts had estimated 628 million euros in profit, according to a company-compiled estimate.

Third-quarter sales will be in line with estimates, buoyed by hospital and clinic demand for diagnostic gear.