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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (54264)	10/18/2001 12:50:35 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Philips warns of Q4 loss and further job cuts By Ian Cameron Electronics Times (10/17/01 17:43 p.m. EST) LONDON — Royal Philips Electronics NV (Amsterdam, Netherlands) expects its losses to continue into the fourth quarter and has warned that it could make further job cuts on top of the 12,000 positions already axed. General economic conditions, exacerbated by the Sept. 11 terrorist attacks, make it likely Philips will record a net loss in the fourth quarter of between roughly $180 million and $225 million, the company said. Philips said it will attribute the fourth-quarter loss to restructuring charges. Excluding those charges, the company said it expects to break even on operating income and said it will generate a positive cash flow from operations. The news came as the company reported third-quarter net losses of about $725 million, slightly higher than the second quarter's loss of about $700 million. Third-quarter sales revenue came in lower than analysts' expectations at about $6532 million, a 23 percent decrease from sales in the same quarter last year. The company said it would speed up restructuring which has already resulted in 12,000 job cuts, rationalize products, consolidate certain businesses, partner with China Electronics in its mobile phone business, write down inventory and amortize goodwill and other intangibles. The company is seeking to reduce overhead by 25 percent. "I cannot rule out that employment cuts will be involved," said Jan Hommen, chief financial officer. "The electronics parts of our company continue to suffer heavily from continued poor market conditions in telecoms and PC-related businesses," said Gerard Kleisterlee, Philips' president and chief executive officer. "Consumer confidence in all major markets has been slipping this year, a trend that has accelerated after the tragic events of Sept. 11," Kleisterlee said. In the consumer electronics division, sales were down 18 percent from the same period last year to about $2.36 billion. While the sales volume was only 2 percent lower, prices were 14 percent down. Sales declines were most severe in videocassette recorders, audio products, monitors, set-top boxes and mobile phones, and were not compensated for by strong growth for DVD players, thus the division turned a loss. Sales declined mainly in Asia and the Americas, with a smaller decline in Europe. Semiconductor sales, at about $816 million for the quarter, were 43 percent lower than last year, with sales volume 29 percent down and a price erosion of 14 percent. Loss for the division was about $264 million compared with a profit of about $339 million a year earlier. Hommen said that capital expenditure for semiconductors over the next financial year would be about $550 million but could be lower, "reflecting our belief that we have sufficient capacity for next year." Ian Cameron is business editor of Electronics Times, EE Times' sister publication in the United Kingdom.