Philips reported a bleak outlook after a surprise quarterly net loss of 1.3 billion euro ($1.8 billion). Just few weeks back, the company issued profit warnings at two key divisions because of tepid consumer demand.
Philips is the world's biggest lighting maker and Europe's biggest consumer electronics producer. Last month, it warned of extremely low second-quarter profits and slow sales growth at both its lighting business and the toasters-to-shavers consumer segment.
The company gave a gloomy outlook for the next two quarters, reduced the profit margin targets for its three core businesses for 2013, and said it would cut costs by 500 million euros. Philips also declared a 2 billion euro share buyback program that will be completed in the next year.
In last 12 months, the shares of Philips have plunged 30 per cent.
The company would not shut or sell any of its businesses as it aims to cut costs.
Some analysts have suggested that Philips should completely exit from the consumer electronics division because it has battled hard to compete with lower-cost Asian manufacturers of consumer electronics.
Philips’ 2013 vision is disappointing and low in terms of profitability.
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