Tue, Oct 18, 2011 - Page 10 News List

Philips’ profits fall 86% for Q3, job cuts planned


Royal Philips Electronics NV, the world’s largest lighting maker, said yesterday its third quarter earnings were down sharply from a year ago, hurt by falling sales, weaker margins and losses at its TV joint venture.

Net profit was 74 million euros (US$102 million) from 524 million euros in the same period a year ago, the company said. Revenues declined 1.3 percent to 5.39 billion euros. Philips said sales would have risen 6 percent if not for the strong euro.

Philips is responding by cutting 4,500 jobs, which it says will help it save 800 million euros annually.

“We do not expect to realize a material performance improvement in the near term,” Philips chief executive Frans van Houten said in a statement.

He said the company would have at least 4 percent sales growth and 10 percent operating margins by 2013.

At the company’s lighting arm, operating profit was 110 million euros, down from 193 million -euros, which Philips attributed to weaker consumer sales and higher raw materials costs. However, the company said it had won some big clients, including France’s Carrefour and “a global Swedish furniture retailer,” presumably IKEA.

At the company’s healthcare arm, operating profit fell to 261 million euros against 282 million euros. In consumer electronics, operating profits fell to 102 million euros from 169 million euros, mostly due to lower margins.

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