Philips Electronics made an official statement in regard to its third-quarter results. The companys earnings over the period came short of initial analysts forecasts due to unfavorable exchange rates and decreasing demand in China and the Russian Federation.
The Chief Executive Officer of the company, Mr. Frans Van Houten, said in Philips statement, cited by Bloomberg: “We are not satisfied with our overall performance in the third quarter. We are facing sustained softness in a number of markets such as China and Russia.” As reported by the Wall Street Journal, he also added: “As we manage through a challenging 2014 and given a number of incidentals, we are not satisfied with our overall performance in the third quarter.”
According to Philips statement, its earnings before interest, taxes, amortisation and one-time items fell by 16% to €536 million over the third quarter of the fiscal year. The result missed initial analysts expectations, which pointed to €554 million in earnings. According to the company, its net loss during the period ended September 30th amounted to €104 million in comparison with a net profit of €282 million reported in the same period a year ago.
Philips projects that its adjusted earnings before interest, tax and amortisation for the second half of the year may be a bit below those reported during the same period a year ago. Still, the company keeps its targets for 2016. Philips was affected by a few one-off charges, including a €366-million one associated with a lost patent lawsuit against Masimo. In addition, lower consumer demand in China and Russia also hit the company.
The Chief Executive Officer Van Houten noted in an interview for Bloomberg: “In Russia, the tensions are high. It’s a market that will require a lot of investments in health care, in technology, in lighting, but for now, we see big headwinds in that space.”
Philips Electronics lost 3.92% to trade at €21.20 per share by 8:35 GMT, marking a one year decrease of 13.20%. The company is valued at €21.11 bilion. According to the Financial Times, the 24 analysts offering 12 month price targets for Philips Electronics have a median target of €26.00, with a high estimate of €33.00 and a low estimate of €23.00. The median estimate represents a 17.83% increase from the last price of €22.07.
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