The biggest lighting company in the world – Philips, which is formerly known as Koninklijke Philips Electronics NV – made an official statement, posting its results for the first quarter of the current financial year. The company revealed its earnings for the first quarter, which missed analysts estimates due to decreased sales and profit that were affected by unfavourable currency effects.
Mr. Frans Van Houten, the current Chief Executive Officer of Philips, said in a statement, which was cited by Bloomberg: “Significant currency impact, market headwinds in, among others, China and Russia, and the business impact of the voluntary suspension at our healthcare production facility in Cleveland resulted in flat comparable sales growth and a decline in EBITA. 2014 will be a challenging year, but we remain very confident of achieving our 2016 mid-term financial targets.”
According to the companys statement, the its earnings before interest, taxes, amortization and one-time items decreased by 13% and reached 368 million euros (508 million dollars), below the median analyst forecast of 413 million in a Bloomberg News survey. In addition, Philips sales decreased by 5% to 5.02 billion euros, compared to 5.26 billion euros posted in the first three months of the financial 2013.
Philips is trying to cut its expenses by about 1.5 billion euros until the end of 2015 by following a restructuring plan and a cost-cutting program it started four years ago. It also plans increasing its margins until the end of 2016.
Recently, the company has shifted its focus to more beneficial segments such as LED lighting, wellness offerings and health-care equipment. Philips also plans to sell its DVD and multimedia units and to become more competitive in the health-care equipment market with some of its most serious rivals such as General Electric Co. and Siemens AG.
Philips Electronics was 1.57% down to trade at 23.37 euros per share by 09:54 GMT, marking a one-year change of +7.87%. The 25 analysts offering 12 month price targets for Philips Electronics have a median target of 28.50, with a high estimate of 31.00 and a low estimate of 23.00. The median estimate represents a 14.30% increase from the last price of 24.94.
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