Philips blames Russia, China slowdowns for plunge into loss
Dutch electronics giant Philips on Monday posted a 103-million-euro ($131 million) net loss on third-quarter earnings, blaming a patent lawsuit and ever-slowing markets in China and Russia.
"We are not satisfied with our overall performance for the third quarter," said chief executive Frans van Houten.
"We are facing sustained softness in a number of markets such as China and Russia. We were also confronted with an adverse jury verdict with a surprisingly high proposed award to Massimo," Van Houten said in a statement issued from Amsterdam.
Earlier this month, a US jury ordered Philips to pay $466 million to American company Masimo for violating two medical device patents.
The eight members of the Delaware jury gave their verdict after a two-week trial, which came after the California-based Masimo had filed a complaint in 2009.
"We will appeal the verdict," Van Houten said.
Sales in China in particular remained flat. Philips said this reflected a tightening of credit conditions for households.
In Russia, the economy is slowing down with poor growth prospects, the Ukraine crisis and sanctions and capital flight having an impact on business.
Looking forward as "headwinds start to abate", Philips' pre-tax earnings for the second quarter is expected to be just below 2013 year-on-year "and we remained committed to our 2016 financial targets," Van Houten added.
Philips last month announced it would split in two in a historic but dramatic move to streamline the 120-year-old company.
Philips, a household name around the world for home appliances, has already in recent years stripped down its business to focus more on advanced lighting technology and on medical technology where margins are strong and less vulnerable to competition from emerging markets.
Founded in 1891, the company employs around 112,000 people worldwide.
© 2014 AFP