Philips offsets good results with warning sales will slow
Dutch electronics group Philips forecast sales growth would slow in the second half of this year given sluggish US and European economies and as television sales drop off after the World Cup.
The outlook offset higher-than-expected quarterly results and brisk trade in markets like China and Brazil, helping push its shares down as much as 4.3 per cent before closing 3.6 per cent down at €24 (£20).
Europe’s biggest consumer electronics maker said it expected sales to slow in the second half to mid-single-digit levels from a 12 per cent comparable growth in the first half amid “continued but slow” recovery in the US and Europe.
Emerging markets — whose share of global sales has risen to 34 per cent from 29 per cent last year — were driving double-digit growth in Brazil, China, Russia and India, mainly in its lighting and consumer lifestyle units. The maker of MP3 players, MRI scanners, toasters and shavers posted second-quarter underlying earnings of €527m versus analysts’ average forecast of €486m. Sales of €6.2bn and net profit at €262m also came in above forecast. Philips has aggressively cut costs even as a nascent economic recovery took hold, helping it to squeeze out earnings in a difficult environment.