Philips Electronics has reported a large fourth-quarter net loss and a record annual loss, with write-downs on stakes in IT-related companies weighing heavily on its results.
Europe's largest consumer electronics maker said net loss for the fourth quarter amounted to €1.53bn (£1bn) as of 31 December, compared with a €1.06bn loss for the the same period the previous year.
Philips took charges of €1.34bn to account for the decrease in value of its holdings in other companies. Of that charge, €921m relates to French IT services company Atos Origin and €275m for LG Philips Displays, a cathode ray tube display joint venture with South Korea's LG Electronics.
Excluding charges, the last three months of 2002 brought a profit of €58m, against a loss of €103m a year ago. Charges in the fourth quarter of 2001 included a €526m write-down, mainly for Philips' stake in Vivendi Universal and other charges totalling €433m, Philips said.
Revenue in the fourth quarter dipped 4% to €8.92bn, from €9.26bn in the final three months of 2001. The weak dollar had a 7%negative impact on sales, which grew 12% in unit terms.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
Sales in the Americas declined, but showed a small rise in Europe and were strong in the Asia Pacific region.
For the full year 2002, Philips posted a record net loss of €3.21bn, surpassing its previous record net loss of €2.48bn in 2001. This contrasted sharply with the €9.66bn net profit Philips recorded in 2000.
With financial markets around the world declining, Philips was forced to take charges of €3.26bn in 2002 to revalue its assets. The biggest charge, at €1.86bn, was for its holding in Vivendi. Excluding all special items, net profit for 2002 would have been €208m.
Philips is streamlining its business and cutting costs where it can to return to profit. The company reduced overhead costs by €25m last year and plans to achieve a total of €1bn in cost reductions. Philips is also selling noncore activities which, the company hoped, would bring in €1bn.