Philips reports 94 percent fall in 2Q profit

[July 13, 2009]  AMSTERDAM (AP) -- Royal Philips Electronics NV, the world's biggest lighting maker, reported Monday a 94 percent fall in net profit for the second quarter, due to weak sales amid the global economic downturn and asset divestments in the same period a year ago.

Net profit was euro44 million ($61.4 million), down from euro732 million. Sales fell 19 percent to euro5.23 billion.

Philips booked net gains of euro533 million in the second quarter of 2008 after selling shares of Taiwan computer chip maker TSMC Ltd.

"We did not see a material improvement in consumer or professional markets in the past three months," Chief Executive Gerard Kleisterlee said in a statement. He said the company remains "cautious about the overall economy and the markets we're operating in." However, its performance would be better in the second half than the first half due to cost-cutting programs and -- possibly -- some recovery in sales.

The company has cut 11,800 jobs since the second quarter of 2008 and now employs 116,000.

Among Philips' major operations, its health care division showed profit of euro93 million, while lighting showed a loss of euro57 million and consumer products lost euro9 million.

Philips had debt of euro800 million at the end of the quarter but held euro3.6 billion in cash.

[Associated Press]

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