Flat-screeb slump flattens Philips Q1 profits

Electronics giant Philips today said losses at its flat-screen television unit had contributed to a slump in profits in its first quarter.

The Dutch company also blamed weaker semiconductor markets for net income falling to €117m from €550m last time.

Group revenues were flat at €6.64bn.

Philips said the “cyclicality” of the sector had a negative impact on its performance, making it the latest in a series of technology firms to report disappointing results.

LG Philips, the flat-screen television maker Philips jointly owns with South Korea’s LG Electronics, recorded losses of €34m in the three months to the end of March, against profits of €215m last time, as it suffered from lower flat-screen prices.

Results at the group’s semiconductor division were hit by a decline in sales, with market conditions not expected to improve until the second half of the current financial year.

However, sales at the group’s medical systems arm were 5% higher while new product ranges fuelled growth in the domestic appliances and personal care division.

Philips is Europe’s biggest consumer electronics manufacturer.

Its results came just days after results from technology giants IBM and Apple fell short of expectations, while electronics Samsung said on Friday that a fall in the price of flat-screen televisions had dented its profits.

The weakness has contributed to a slump in global markets, with the Dow Jones Industrial Average suffering its biggest one-day fall for nearly two years on Friday and London’s FTSE 100 Index following suit.