Sagging TV Sales Hurt Philips
reports, and wire, Tribune-Review/Pittsburgh Tribune-Review
The television age appears to have faded somewhat for Philips, the Dutch company that carries a global reputation for its home electronics.
Sagging TV sales, especially in the United States, dragged down first-quarter profits, as Royal Philips Electronics NV issued its first earnings report since acquiring Respironics Inc. of Murrysville last month. Philips on Monday reported net income of $347 million, nearly 20 percent lower than the $431 million analysts had forecast.
Net profit was down 75 percent from $1.38 billion in the same period last year -- a quarter boosted by a $1.16 billion sale of a semiconductor manufacturer.
Chief Financial Officer Pierre-Jean Sivignon said there was stiff competition in the TV market.
"The U.S. remains the black spot, but when we look at the quarter, it was tough all across," he said.
Europe, where the Philips brand is much stronger than in North America, also lost money on TV sales and is unlikely to show any profit for the rest of the year, he said.
As TV sales lag, Philips has taken aggressive action. Last week it announced a five-year licensing deal with Funai Electric Co. Ltd. of Japan to market the Philips brand in North America. Philips is taking a charge of $197 million to cover the cost of the transfer and other steps to boost TV sales.
Sivignon said Philips had no immediate plan to find a similar solution in Europe but was keeping its options open. For the time being, it is focusing on cost efficiencies for TVs -- a product it has been developing since 1925.
This quarter included a gain of $131 million for the partial sale of LG Display, Philips said.
Shares fell 3 percent to close at $36. …