AMSTERDAM—Philips shares surged 35 percent early on Monday as the medical devices maker announced a smaller-than-expected settlement to resolve claims over recalled breathing devices in the United States.

Philips said it had agreed to pay $1.1 billion to settle all personal injury claims filed in the United States, ending uncertainty that had slashed its market value over the past three years.

“This settlement is significantly lower than expectations of $2–4 billion and worst case of $10 billion,” Barclays analysts said.

“It comes a lot earlier than anticipated and removes an overhang many have worried would linger for years.”

Amsterdam-based Philips has grappled with the fallout of its recall of millions of breathing devices and ventilators for three years, as fears of large litigation bills lopped off about two-thirds of its market value.

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