Dutch consumer electronics giant Royal Philips Electronics (PHG: Quote,PHGFF.PK) on Monday reported a loss for the fourth quarter that reflected an anticipated weakness in European sales and a loss pertaining to the Television business, which is now part of a joint venture. The company also issued a cautious outlook for 2012.
CEO Frans van Houten said, "Our fourth quarter results were impacted by weak European sales, postponement in deliveries of existing orders in our Healthcare sector, and inventory correction actions and other operational issues in our Lighting business."
Fourth-quarter net loss attributable to shareholders was 162 million euros ($213.09 million) or 0.17 euros per share, compared to prior year's net income of 463 million euros or 0.49 euros per share. Following a long-term alliance for its television business with TPV, the company reported the results of television business to be carved out as a loss of 272 million euros from discontinued operations.
On a continuing operations basis, net income plunged to 112 million euros from 503 million euros last year. The latest quarter results also included restructuring and acquisition related charges of 100 million euros.
Quarterly sales grew 3 percent to 6.71 billion euros from 6.50 billion euros last year, helped by growth across all operating sectors.
Healthcare sales were 3 percent higher, driven by strong growth in equipment orders in growth geographies, despite weakness in the European markets.
In consumer lifestyle division, sales increased 3 percent driven by higher sales in the three growth businesses - Personal Care, Health & Wellness, and Domestic Appliances, while sales declined at Lifestyle Entertainment.
Lighting sales increased 5 percent, driven by double-digit sales growth at Lamps and Automotive. LED-based sales grew 37 percent, while Lumileds showed a decline in sales.
However, earnings from both lighting and healthcare segments dropped from last year. Restructuring and acquisition-related charges hurt the lighting segment, while market weakness in Europe, investments and restructuring charges impacted healthcare earnings.
Sales in the mature geographies were flat as a decline in Western Europe was offset by growth in North America and other mature geographies, the company noted. Growth geographies delivered 10 percent increase in sales.
For fiscal year 2011, net loss attributable to shareholders was 1.30 billion euros or 1.36 euros per share, compared to prior year's profit of 1.45 billion euros or 1.52 euros per share. Annual sales grew to 22.58 billion euros, a 4 percent increase on comparable basis.
Further, the company said it proposes to a dividend of 0.75 euros per share, stable with last year. Philips also extended the timing of the ongoing 2 billion euros share buyback program until the end of the second quarter of 2013.
Looking ahead, Houten said, "We are cautious about 2012 given the uncertainty in the global economy, and Europe in particular. In addition, we expect our 2012 results to be affected by the previously communicated restructuring charges and one-time investments aimed at improving our business performance trajectory, as part of the multi-year Accelerate! program."
Excluding these additional charges, the company expects underlying operating margins and capital efficiency in the sectors to improve in the latter part of 2012.
Philips added that it is committed to improve operational performance to achieve mid-term 2013 financial targets, despite concerns about the economic environment.
In Amsterdam, Philips shares closed Friday's trading at 15.58 euros, down 0.01 euros or 0.06 percent.
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by RTT Staff Writer
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