Philips profit falls on strong euro, reducing demand in Russia and China
Following the consumer, light and health-care devices manufacturer reported a larger-than-expected drop in quarterly operating income Philips’ shares tumbled on Tuesday.
It warned this season is likely to be difficult, with slowing demand for medical equipment in China along side its lighting business being there hit by weakness in building.
Philips also said medical equipment sales in Russia flagged up concerns concerning the ramifications of the Ukraine turmoil and had rejected.
The strong euro was another element in a 22 percent decline in earnings before interest and tax and amortisation (EBITA) within the 3 months upto the conclusion of March. It had been 314 million dollars as group sales fell 4.5 percent.
Leader Frans van Houten said he was nevertheless confident that Philips could strike its operating profit margin goal of 11-12 percent by 2016, although improvement this season towards that objective could be difficult.
“We have changed (our perspective) by stating it’s a difficult year and therefore meaning that the improvement this season is likely to be challenging,” he told journalists during a conference call.