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Consumer Electronics Firm Philips Issues Shock Profit Warning

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http://www.guardian.co.uk/business/2011/jun/22/philips-issues-shock-profits-warning

Lighting and consumer electronics giant Philips issued a shock profit warning Wednesday, saying worse than expected demand in western Europe hurt its performance in the second quarter.

Shares dropped 10% in the first minutes of trading in Amsterdam, to €16.095.

The company said its world-leading lighting arm will report low single-digit sales growth, down from mid-single-digit growth, along with shrinking margins.

The company said the arm's operating earnings before amortisation will be around €85m (£75m) against the previous quarter's €193m.

Philips said its consumer products arm is facing weak demand, declining licensing revenues and costs from exiting most of its television business. Here, it said operating earnings before amortisation will be around €50m, down from €119m.

Philips said it will cut costs and take other unspecified measures in response. The company is due to report full second-quarter earnings 18 July.

More shocking news that consumers aren't spending, still looks like more jobs will be going to fuel the jobless recovery.

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I love these 'shocks' me. :lol:

It isn't too difficult to see that the consumer electronics industry has been the perfect microcosm of what is wrong with the economy in general.

Everyone went out pre-crash and spunked loads of credit on fancy new TV's, digital recording devices, new phones, laptops, Wii's you name it.

Then the following happened:

1. No more credit as consumers maxed out

2. Everyone has shiny new gear and doesn't need new stuff, e..g, my 2006 LCD TV and my 2006 Laptop work great - I'll keep them for a few more years before upgrading I reckon).

One guess what has happened to trading levels at the manufacturers and retailers who sell this stuff, especially those that took on loads of debt to expand their stores to meet 'growing' consumer demand?

One guess, what has happened to the banks that lent the stores the money to expand?

You get the picture. Everything is going bust.

Edited by General Congreve

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1. No more credit as consumers maxed out

2. Everyone has shiny new gear and doesn't need new stuff, e..g, my 2006 LCD TV and my 2006 Laptop work great - I'll keep them for a few more years before upgrading I reckon).

Ribbish... I just bought a replacement for my 2008 bought LCD 37" TV.... an LG Razor 42" Plasma!

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Ribbish... I just bought a replacement for my 2008 bought LCD 37" TV.... an LG Razor 42" Plasma!

Well if you buy Asda LCD TV's not only will need replacing but you will be able to afford to do so when they break after 3 years use. :lol:

Mine's a Sony. ;)

Edited by General Congreve

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Well if you buy Asda LCD TV's not only will need replacing but you will be able to afford to do so when they break after 3 years use. :lol:

Mine's a Sony. ;)

Just realised my Pioneer is 6 years old now. :o

It still looks just as good as new. B)

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Speaking of the jobless recovery... I a seeing a big downturn in IT roles at the moment both contract and permanent... with rates and salaries noticeably going down...

At the same time, still waiting to hear of one - just one - public sector worker fired.

We is Greece we are - chap on Fivelive last night pointing out that most of the job cuts in Greece have been private sector with, so far this year, not a single Greek public sector worker losing a job.

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Speaking of the jobless recovery... I a seeing a big downturn in IT roles at the moment both contract and permanent... with rates and salaries noticeably going down...

At the same time, still waiting to hear of one - just one - public sector worker fired.

We is Greece we are - chap on Fivelive last night pointing out that most of the job cuts in Greece have been private sector with, so far this year, not a single Greek public sector worker losing a job.

I bet they'll have been pribic sector workers, nominally private sector but dependent on public sector contracts. They're easier to cut due to lack of social cohesion such as union membership.

PS. No wonder Philips is going bust. £70 for a shaver? £2 for 10 disposables down wilko's!

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I thought Philips had a bit of a bad rep for lcd tvs anyway, at least when they first came out. I remember going into Comet and seeing 2 pretty big screens going nuts.

IIRC Philips gave up on TVs a few years ago.

Edited by beccles

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Just realised my Pioneer is 6 years old now. :o

It still looks just as good as new. B)

I've got a lovely Panasonic CRT widescreen high end 2001 £1000 new (I bought it for £30 on ebay) and the picture blows all these flat screen TVs out of the water on SD stuff. No blurring or pixellation. Lovely cracking picture and I'm keeping it until something that is good as CRTs comes out, eg OLed.

Edited by Spoony

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I've got a lovely Panasonic CRT widescreen high end 2001 £1000 new (I bought it for £30 on ebay) and the picture blows all these flat screen TVs out of the water on SD stuff. No blurring or pixellation. Lovely cracking picture and I'm keeping it until something that is good as CRTs comes out, eg OLed.

Found a store in town yesterday that still sells CRT's. Widescreen from £35! Couldn't believe how flickery and blurry they were. God knows how we put up with those things for decades without going nuts or suffering fits!

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More shocking news that consumers aren't spending, still looks like more jobs will be going to fuel the jobless recovery.

I thought that consumer electronics was a relatively small part of what Philips now does, and that most of their business comes from commercial and industrial lighting products (e.g. sodding great sodium bulbs for streetlights - that sort of thing) and big ticket medical technology such as MRI scanners, X-ray imaging systems etc. They used also to be a major manufacturer of cinema projectors, but sold that division in the late '90s (i.e. just before the transition from film to digital projection began - a wise move).

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I thought that consumer electronics was a relatively small part of what Philips now does, and that most of their business comes from commercial and industrial lighting products (e.g. sodding great sodium bulbs for streetlights - that sort of thing) and big ticket medical technology such as MRI scanners, X-ray imaging systems etc. They used also to be a major manufacturer of cinema projectors, but sold that division in the late '90s (i.e. just before the transition from film to digital projection began - a wise move).

I believe LG was a joint venture with Philips but is now independent.

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Just realised my Pioneer is 6 years old now. :o

It still looks just as good as new. B)

Don't worry it won't be long before all new electronics will come with a built in electronic, timed self destruct feature... ;)

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All electronics are getting stupidly cheap. I am looking at getting a new desktop PC, Dell Studio XPS 7 core rocket ship with hardcore graphics card? £600. I remember needing to spend £1000 to get a decent box, 10 years ago. You can get a basic model with a 1920x1080 studio display for £400.

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an LG Razor 42" Plasma!

Is that the cutting edge?

Mine's a Sony. ;)

I've had a fair bit of Sony stuff over the years and (IMO) they've never lived up to their brand hype.

Case in point, my Kindle screen beats the pants off my Sony PRS-650.

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I've had a fair bit of Sony stuff over the years and (IMO) they've never lived up to their brand hype.

Ditto. I've had 2 (expensive) Sony laptops; both died weeks out of warranty.

Bought unsexy mid-range brands ever since, no trouble.

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I've got a lovely Panasonic CRT widescreen high end 2001 £1000 new (I bought it for £30 on ebay) and the picture blows all these flat screen TVs out of the water on SD stuff. No blurring or pixellation. Lovely cracking picture and I'm keeping it until something that is good as CRTs comes out, eg OLed.

Woow....that sounds like our 28" Panasonic, with the only difference that I did buy it "new". It's bulky and not good for the electricity bills, but I have seen very few modern flat panel TVs that can compete in picture quality with these Panasonics. I hope it will keep working for another decade until a decent technology, such as OLED, is common.

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I'm shocked that these companies all expect automatic profits every single year. Surely they should all plan for the 'unexpected' like the rest of us and just count themselves lucky that they still have a business.

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I'm shocked that these companies all expect automatic profits every single year. Surely they should all plan for the 'unexpected' like the rest of us and just count themselves lucky that they still have a business.

Philips has quite a few divisions and I think profit and loss is sometimes irrelevant. It is a major Dutch employer . . . it was originally set up to give farmers something to do. (Making light bulbs.) It enjoys a lot of state 'support'.

It usually does do better out of creating and selling technology than making end products . . . this has been the way for some years. But the R&D is very strong. Not a company I'd worry about.

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