Royal Philips Electronics NV, Europe's largest consumer-electronics maker, said it had a loss in the first quarter because of costs related to closing two US semiconductor factories. The company's shares rose.
The net loss was 69 million euros (US$74 million), compared with a profit of 9 million euros in the year-earlier quarter, Philips said in a statement.
Analysts in a Bloomberg survey expected a loss of 108 million euros. Sales fell a more-than-expected 14 percent as the US dollar weakened against the euro.
"Semiconductors is still a tough business to be in, so it's good Philips is also in more stable businesses such as lighting and medical," said Sjaak Spobeck, who helps manage the equivalent of US$6.5 billion, including Philips shares, at AZL Vermogensbeheer.
Apart from currencies hurting sales, "I didn't see any big negative surprises," Spobeck said.
Philips chief executive officer Gerard Kleisterlee has since taking the helm in May 2001 moved production to countries with lower labor costs, reined in spending and eliminated more than a fifth of the workforce to help return the company to profit after two straight record annual losses.
"Ongoing economic and political uncertainties mean that Philips will continue to make business planning on the assumption of no short-term improvement in economic conditions," the company said in the statement confirmed by spokesman Andre Manning.
Sales were lower partly because the US dollar was worth on average about a fifth less in the first quarter against the euro than in the year-earlier period.
The first-quarter operating loss at Philips's chip business widened to 178 million euros from 108 million euros. Sales in the unit fell 5 percent to 1.13 billion euros from the year-earlier quarter, and dropped 16 percent from the fourth quarter.
Philips expects second-quarter sales at its chip unit to rise between 7 percent and 10 percent from the first quarter, the company said in a presentation posted on its Web site.
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