Philips posts record loss
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February 7, 2002: 3:42 a.m. ET
Dutch chip maker does not see markets strengthening this year
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AMSTERDAM (CNN) - Philips Electronics, Europe's biggest consumer electronics company, posted a fourth-quarter loss as demand for chips and televisions slumps.
The Dutch company made a loss of 1.14 billion ($1 billion), or 90 cents a share loss, in the three months to December 31, compared with a profit of 2.79 billion, or 2.16 a share, a year ago. Sales fell 16 percent to 9.26 billion.
A U.S.-led economic slowdown and worldwide job losses are making consumers think twice before splashing out on replacing electronic goods, while mobile phone sales have stagnated.
"2001 was tough year for Philips," said Chief Executive Gerard Kleisterlee.
Philips warned the severe declines in the IT and telecommunications markets have now stopped, but it did not see markets strengthening.
"Economic conditions around the world continue to point to a limited growth environment. Improvements in results in 2002 will come mainly from cost reductions, efficiency improvements and restructuring programmes," the Dutch group said.
The company also reported its largest full-year loss since 1996. Philips said it made a loss of 2.6 billion in 2001, compared with a record profit of 9.6 billion a year ago.
Analysts polled by Reuters expected an average net loss from continuing operations of 2.3 billion euros.
Europe's third biggest chipmaker had forecast a net loss of some 600 million euros, excluding restructuring and other one-off charges. The company has slashed more than 12,000 jobs over the last year in a bid to return the company back to profit.
The cost of jobs losses, restructuring its business and fall in value of shares held in Vivendi Universal (PEX), Europe's biggest media company, and GN Store Nord, which makes headsets for mobile phones, was 1.7 billion.
Philips' closely watched semiconductor business, which accounted for about a third of the company's profits in previous years, saw sales tumble 44 percent to 940 million in the fourth quarter. The chip industry is suffering its worst ever downturn in 2001 as overcapacity led to a slump in prices.
Its stocks, which has fallen almost 40 percent over the last 12 months, slipped 1.8 percent to 28.85.
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