Philips posts first loss since 2003 on writedowns

BLOOMBERG





Royal Philips Electronics NV, Europe’s largest maker of consumer electronics, posted its first quarterly loss in almost six years after writing down the value of stakes in LG Display Co and NXP BV.

Philips said it would stop buying back stock to preserve cash. The fourth-quarter net loss was 1.47 billion euros (US$1.9 billion), or 1.57 euros a share, compared with a profit of 1.39 billion euros, or 1.30 euros, a year earlier, the Amsterdam-based company said in a statement yesterday. It was the company’s first quarterly loss since the first quarter of 2003, Bloomberg data shows.

Philips, led by chief executive officer Gerard Kleisterlee, said on Dec. 4 it would write down its stakes in LG Display, the world’s second-largest maker of liquid-crystal displays, and NXP, Europe’s third-biggest maker of semiconductors, by 1.1 billion euros. Markets for the consumer lifestyle and lighting businesses were deteriorating, the company said at the time.

The net loss had been seen at 1.24 billion euros, the median estimate of nine analysts Bloomberg News surveyed by telephone and e-mail. Fourth-quarter sales fell to 7.6 billion euros, from 8.37 billion euros a year earlier, beating the median estimate of 7.2 billion euros.

Philips shares dropped 51 percent in the past year in Amsterdam trading, compared with a 47 percent slide for the benchmark Amsterdam Exchanges Index.

“Our fourth-quarter results confirm the expectation we expressed early December that the short-term economic outlook is worsening and that 2009 is likely to be a very challenging year,” the company said in the statement.

Philips will pay a dividend of 70 euro cents a share, unchanged from last year.

The company will cut 6,000 jobs this year, Kleisterlee said in a conference call with reporters yesterday.