Philips Takes TV Loss on Restructuring

Jul 14, 2008  •  Post A Comment

Royal Philips Electronics, the world’s No. 5 liquid-crystal display television maker, took a second-quarter loss on its television operations from restructuring charges as it prepared to outsource its TV sales in North America to cut operating losses. TV revenue rose on demand from emerging markets and the Euro 2008 soccer tournament.
The Dutch conglomerate had a TV operating loss of 112 million euros ($178.2 million)—about half of which stemmed from the restructuring charges—despite boosting sales 8% to 1.36 billion euros ($2.16 billion), Philips said earlier today. TV revenue accounted for about a fifth of the revenue for the parent company, whose net income fell 54% to 720 million euros ($1.15 billion) on a year-earlier gain from sales of Taiwan Semiconductor Manufacturing shares.
Philips said in April that it would outsource its North American TV production to Tokyo-based Funai Electric for at least five years starting in September. Total restructuring charges will cut Philips’ earnings by 125 million euros ($198.9 million) this year, the company said today.
Philips sold 8.7% of the world’s LCDs in the first quarter and had a 13% European market share among all TV types, according to NPD Group unit DisplaySearch. Funai was the fourth-largest North America TV maker, trailing Samsung, Sony, and Vizio, while Philips didn’t crack the North American top 5, DisplaySearch said.
(Editor: Baumann)


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