Thursday December 4, 09:36 AM
Philips may no longer meet 2010 earnings per share target
AMSTERDAM (AFP) - Dutch medical and consumer electronics giant Philips (Amsterdam: PHI.AS - news) said Thursday it no longer expected to meet its target of doubling earnings before interest, tax and amortisation (Ebita) per share by 2010.
"The continually deteriorating economic environnment means that the company no longer expects to be able to realise this goal," said a statement from the company, which announced last month it would cut about 1,600 jobs.
"The speed and ferocity by which the weakening economy is affecting demand in key markets is now also taking its toll on the financial performance of Philips," said the company's chief executive officer Gerard Kleisterlee.
Lower demand in the consumer, construction and automotive markets was having an impact, and Philips would have to act swiftly to minimise the effect of the global downturn on its profitability, said the statement.
"The downturn we see now is without recent comparison and is developing much faster and deeper than expected," said Kleisterlee.
The company said it expected to spend an extra 110 million euros (about 139 million dollars) on measures to reduce costs and protect margins, bringing total restructuring charges for the fourth quarter to 340 million euros.
It would also write down about 1.1 billion euros on the value of its current financial holdings -- mainly in LG Display and NXP in the last financial quarter.
Philips had reported net income of 357 million euros in the third quarter, 7.8 percent higher than the previous quarter and operational earnings of 128 million euros.
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