Philips Reports Q1 Net Loss

Sales drop 17%.

Dutch electronics giant Philips on Tuesday reported a 57 million euro (US$76 million) net loss for the first quarter of 2009 and warned the economic crisis would further hurt business in the months ahead. The $76 million net loss was accompanied by a 17% decline in sales to 5.1 billion euros. Philips saw net profit of 294 million euros 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 98 million euros and a net profit of 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. "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." A cost-reduction program launched last year that includes cutting 6,000 jobs will allow the company to save 500 million euros at year's end instead of 400 million as previously reported, Kleisterlee said. It reported a loss before interest, tax and amortization of 74 million euros compared to a profit of 265 million euros 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 2%, the company said, while consumer electronic sales dropped 25% to 1.8 billion euros. Lighting division sales fell 19% to 1.5 billion euros. Copyright Agence France-Presse, 2009

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