Consumer electronics to brighten Philips' first quarter
By Sara Webb
AMSTERDAM (Reuters) - Philips Electronics (PHG.AS: Quote) is expected to report a 35 percent rise in quarterly net profit on Monday, supported by a stronger performance at its consumer electronics division after a year of disappointing results and a string of setbacks.
Investors want to see evidence of a turnaround at the Dutch group now that Chief Executive Frans van Houten has been in the job for a year and will be looking for signs that management changes and restructuring measures are starting to pay off.
Europe's largest consumer electronics maker made a loss of 160 million euros in the fourth quarter of last year after a profit of 465 million a year earlier and has been cautious on prospects for 2012.
Philips shares have fallen about 30 percent in the past year, underperforming the Amsterdam index .AEX by 18 percentage points after a series of profit warnings.
Philips, the world's biggest lighting maker, has blamed its poor performance on weak economic growth, fragile consumer spending and government budget cuts in several of its key markets.
The company, also a top-three maker of hospital equipment, has struggled to compete with lower-cost Asian makers of consumer electronics such as televisions.
Cuts to government budgets and other austerity measures in the United States and Europe have hit demand for its lighting systems and hospital equipment.
The group has embarked on a restructuring and last month sold its high-tech office campus in the Netherlands to a consortium of private investors for 425 million euros as part of its cost-cutting plans. It will lease back several of the buildings instead. Continued...