Philips: profitability down, 4000 layoffs, but stock resists
(CercleFinance.com) - On Monday Philips announced its intention to make about 4,000 redundancies worldwide, after posting an operating loss of 1.
5 billion euros for Q3, having been hit hard by supply problems, inflationary pressures, the resurgence of Covid in China, on top off the war in Ukraine, resulting in LFL sales falling 5% in the period to 4.3 billion euros.
The Dutch healthcare products maker posted an EBITA of just 209 million dollars, i.e. 4.8% of sales, compared with 512 million, or 12.3%, a year ago.
By comparison, analysts were expecting profit of around 330 million euros.
Philips' results also reflect the difficulties of its respiratory equipment business in the US, which resulted in an impairment charge of EUR 1.3 billion in the quarter.
By accelerating its productivity measures, the group hopes to save around 300 million euros per year.
Its job cuts, 4,000 jobs, represent slightly over 5% of its total workforce.
No big deal market-wise though - the share was actually up slightly (+0.1%) in early trading following these announcements, outperforming its European technology sector index (-0.1%).
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