Investors took a dim view of Philips’ tumbling profit today as its shares faded by more than 7%.
The world’s largest lighting company said weaker business in China and Russia and currency movements hit sales and profit in the first quarter.
It reported earnings down 22% to €314 million for the period – below analyst estimates and group sales fell 4.5%.
Net profit for the quarter of €137 million was 15% below its 2013 first quarter profit figure.
The 123-year old Dutch group, which has been focusing on growing its healthcare and LED lighting businesses, has been particularly hit by the strength of the euro against other currencies and slowing demand for its medical equipment in Russia and China.
The group has been in turnaround mode since chief executive Frans van Houten took over in April 2011. He has cut costs and streamlined its business model. Last year it sold its home entertainment business to Japan’s Funai Electric, which will make the products under licence, and previously it sold its TV arm.
Instead Philips has focused on growing its healthcare division which includes medical equipment for radiology, cardiology, oncology specialists.
Van Houten said the first quarter results “reflect a challenging start to the year” but he said he is “confident” it will meet its 2016 targets.
Since van Houten joined, its shares have been recovering and rose nearly 80% over two years. But today they slipped 7% — the biggest drop since June 2011.
