Philips sales decline 19 percent in Q2

MUNICH, Germany — Consumer and medical electronics giant Royal Philips Electronics reports sales of €5.2 billion (about $ 7.28 billion), down 19 percent against the same quarter last year. The results were in line with guidance, the company said.

The company's operating profit (EBIT) plummeted from €303 million in Q2/2008 to only 8 million. Net income shrunk from €735 million to €45 million.

The decline affected all business segments. In I&EB which was hit the worst with sales dropping by 60 percent, intellectual property licenses were in low demand. In the consumer segment, TV, audio and multimedia products did not find buyers which led to 30 percent lower sales. The healthcare segment fared relatively strong with a decline of only 5 percent, but even here, buyers of Clinical Care Systems, Imaging Systems, and Healthcare Informatics goods proved to be reluctant.

Nevertheless, the Healthcare sector is the place where Philips sees a silver lining since compared with Q1, sales outside the US showed a modest growth.

Philips CEO Gerard Kleisterlee said the company does not see a material improvement in consumer and professional markets. "We remain cautious about the overall economy and the markets we are operating in," he said, adding that he expects better performance for the second half of the year. However, this improvement will be based on the perpetuation of cost control measures. Expressively he did not rule out additional savings programs.

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Philips hit by consumer, automotive, healthcare weakness