Royal Philips Electronics NV, Europe's largest maker of televisions, said its US electronics business may lose money in the first part of next year. The company expects the unit to have a profit for the whole of next year.
"I don't think that they'll be profitable all quarters next year, but for the whole year they should be," chief financial officer Jan Hommen was quoted as saying in an interview with Dutch news wire, Betten Beursmedia News.
Spokesman Andre Manning confirmed Hommen's remarks.
Amsterdam-based Philips said last month that it plans to reduce costs at its consumer electronics unit, its largest by revenue, by another 400 million euros (US$453.9 million) by the end of 2005 as competition increases. The savings are in addition to a 1 billion-euro reduction in expenses for the whole company to be completed by the end of this year.
The company is working to return its US electronics business to profit in the fourth quarter after years of losses.
Meeting the goal will be "a tough job," Hommen was quoted as saying. He reiterated earlier comments that the unit has a "good chance" of meeting the target.
The company, also Europe's third-largest maker of semiconductors used in mobile phones and televisions, expects its computer chip unit to be profitable for the whole of next year, Hommen was cited by Betten Beursmedia News as saying.
Philips, which trails STMicroelectronics NV and Infineon Technologies AG in Europe in making chips, expects the unit to return to a profit in the fourth quarter, helped by cost-cutting measures, such as closing factories and shedding 1,600 jobs.
Total capital spending at the company will be about 1 billion euros next year, similar to this year's level, Hommen told the news wire. Of this year's spending, as much as 350 million euros will go to the chip unit, the news wire quoted him as saying.
Philips' sales in China are expected to double in the next five years from the current level of about 7 billion euros, Hommen was quoted as saying.
The company, founded in 1891, has invested about 2.5 billion euros in China.
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