Philips Electronics on Monday reported a 45 percent fall in fourth-quarter core profit to 503 million euros, in line with the company's own forecast earlier this month and said it was cautious on prospects for 2012, especially in Europe.
The Dutch consumer electronics, lighting and healthcare group had already given investors advance notice that quarterly core profit would be significantly lower than a year ago, and that it would have to book charges for inventory it has not been able to shift because of weak consumer demand in Europe.
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, Chief Executive Frans van Van Houten said.
We are cautious about 2012 given the uncertainty in the global economy, and Europe in particular, he said in a statement.
Europe's largest consumer electronics producer and a top-three maker of hospital equipment, has been hammered by rising raw material costs, sagging consumer confidence, sluggish construction markets and government budget cuts in the healthcare sector.
Since van Houten took the top job in April, he has issued two profit warnings, reset financial targets, slashed 4,500 jobs, seen several top executives replaced and tried to hive off the loss-making TV business.
The most recent profit warning, on January 10, gave investors advance notice that the group's underlying profits would fall by more than 40 percent and that sales growth had slowed across its biggest divisions.
On Monday, Philips said fourth-quarter sales were 6.721 billion euros, compared with analyst expectations for 6.627 billion euros but down 3.4 percent from the same period a year ago.
The firm reported a net loss of 160 million euros, a decline of 625 million euros compared to the fourth-quarter 2010, due to lower earnings at both the lighting and health divisions as well as a 272 million euro loss from the television business.
Speaking on TV shortly after announcing the fourth-quarter results, Van Houten said he was confident the sale of the TV business, which still needs to be approved by Hong Kong-based TPV shareholders and regulators, will close in the first quarter. TPV is holding a shareholder meeting on February 22 to vote on the deal.
The Dutch group competes with Samsung and LG Electronics among others in consumer electronics, and with General Electric and Siemens in the hospital and lighting markets.
(Reporting By Roberta B. Cowan; Editing by Sara Webb and Jane Merriman)