Philips posts EUR 57 million net loss for Q1
The net loss, along with a 17 percent decline in sales, is set to worsen in the months ahead, says the company’s CEO.THE HAGUE – Dutch electronics giant Philips on Tuesday reported a EUR 57 million net loss for the first quarter of 2009 and warned the economic crisis would further hurt business in the months ahead.
The net loss was accompanied by a 17 percent decline in sales to EUR 5.1 billion. Philips saw net profit of EUR 294 million during the same period last year.
The results correspond to forecasts from eight analysts questioned by Dow Jones Newswires who predicted a figure between a net loss of EUR 98 million and a net profit of EUR 28 million.
"In the first quarter of 2009 we have seen a significant further deterioration of our markets," CEO Gerard Kleisterlee said in a statement.
For the first time Philips Healthcare division has been affected by the economic downturn.
"While the effects were felt most strongly in our activities that cater to the consumer market and to the construction and automotive industries, our healthcare sales are now impacted as well. We expect no material change to this situation in quarter two." Said Kleisterlee.
A cost-reduction programme launched in 2008 includes cutting 6,000 jobs which will allow the company to save EUR 500 million at year's end instead of EUR 400 million as previously reported, Kleisterlee said.
It reported a loss before interest, tax and amortisation (Ebita) of EUR 74 million compared to a profit of EUR 265 million in the first quarter of last year.
The company said that it had 5,126 fewer jobs in the first quarter than the previous one due to both structural changes and seasonal reductions.
Philips' sales slide has come with the global economic crisis taking a toll on demand.
Its medical unit sales were down two percent, the company said, while consumer electronic sales dropped 25 percent to EUR 1.8 billion.
Lighting division sales fell 19 percent to EUR 1.5 billion.
There is more bad news for Philips as millions of defective Senseo coffee-making machines throughout the world have been recalled. The defective machines were manufactured between June 2006 and November 2008.
Parts of the machine may fly apart under pressure as calcium deposits constrict the flow of air through a valve.
Such an accident happened in the Netherlands and there were no reports of any injuries.
AFP / Radio Netherlands / Expatica