Philips (NYSE:PHG) plunged into red ink during the 4th quarter and full year, as its health care division posted huge earnings declines for both periods.
The news sent PHG shares down 1.7% today on Wall Street, as investors reacted to the dismal numbers.
The Dutch electronics conglomerate reported losses of €162.0 million (~$210 million), or €0.17 per diluted share (~22 cents), on sales of €6.71 billion (~$8.70 billion) for the 3 months ended Dec. 31, 2011. That’s a top-line gain of 3% compared with profits of €463.0 million (~$600 million), or €0.49 diluted EPS (~63 cents), on sales of €6.50 billion (~$8.42 billion) during the same period in 2010.
For the full year, Philips logged losses of
€1.30 billion (~$1.68 billion), or €1.36 (~$1.76) diluted EPS, on sales of €22.58 billion (~$29.26 billion). That translates to a 1.3% addition to the top line compared with profits of €1.45 billion (~$1.87 billion), or €1.52 (~$1.97) diluted EPS, on sales of €22.29 billion (~$28.88 billion).
Philips Healthcare reported 4th-quarter operating profits of
€359.0 million (~$465.2 million) on sales of €2.72 billion (~$3.53 billion), for a top-line gain of 3.1 percent but a bottom-line slide of 21.8% compared with Q4 2010. Full-year profits for the division were €93.0 million (~$121 million) on sales of €8.85 billion (~$11.47 billion) – representing a 2.9% sales increase but a whopping 89.9% decrease in profits.
"Our fourth-quarter results were impacted by weak European sales, postponement in deliveries of existing orders in our healthcare sector, and inventory correction actions and other operational issues in our lighting business," CEO Frans van Houten said in prepared remarks. "We are cautious about 2012 given the uncertainty in the global economy, and Europe in particular. In addition, we expect our 2012 results to be affected by the previously communicated restructuring charges and one-time investments aimed at improving our business performance trajectory, as part of the multi-year Accelerate! program. Excluding these additional charges, we expect the underlying operating margins and capital efficiency in the sectors to improve in the latter part of 2012."
PHG shares closed at $20.03 today, down 1.7%.
