Philips Posts Q2 Loss, Updates FY22 View; Stock Down
Shares of Philips Electronics NV were losing more than 10 percent in the morning trading in Amsterdam as well as in pre-market activity on NYSE after the Dutch consumer electronics giant reported Monday a loss in its second quarter, compared to a profit last year, hurt by weak sales.
Looking ahead, the company said it expects to resume growth from the third quarter onwards, with comparable sales growth and improved profitability in the second half of the year.
Further, Philips revised fiscal 2022 outlook to 1 percent-3 percent comparable sales growth and around 10 percent Adjusted EBITA margin, driven by 6-9 percent comparable sales growth in the second half of 2022. The company’s previous sales growth view was from 3 percent to 5 percent.
For the 2023-2025 period, Philips now expects to deliver comparable sales growth of 4 percent to 6 percent and an Adjusted EBITA margin of 14-15 percent, with further improvement thereafter.
Frans van Houten, CEO, said, “Looking ahead to 2023 and beyond, while we continue to see risks and a challenging macro-environment, we expect our supply chain measures to take full effect, resulting in a significant improvement in the conversion of our order book to revenue. Our pricing and increased productivity measures will expand margins.”
For the second quarter, net loss attributable to shareholders was 22 million euros or 0.02 euros per share, compared to prior year’s net income of 150 million euros or 0.16 euros per share.
Loss from continuing operations was 24 million euros or 0.03 euro per share, compared to income of 65 million euros or 0.07 euro a year ago.
Adjusted income from continuing operations attributable to shareholders was 130 million euros or 0.14 euros per share, compared to 366 million euros or 0.40 euros per share last year.
Income from operations amounted to 11 million euros, down from 85 million euros a year ago.
Adjusted EBITA was 216 million euros, or 5.2 percent of sales, compared to 532 million euros, or 12.6 percent of sales, in the prior year. Adjusted EBITDA was 461 million euros or 11 percent of sales, down from last year’s 762 million euros or 18 percent of sales.
Sales for the second quarter declined 1 percent to 4.18 billion euros from 4.23 billion euros in the prior year.
Sales in mature geographies grew 4 percent with strong growth in North America, despite weakness in Western Europe. Sales in growth geographies declined 13 percent.
Comparable sales for the latest quarter declined 7 percent, mainly caused by continued supply shortages and prolonged lockdowns in China, as well as inflationary pressures and the Russia-Ukraine war. Comparable sales in China declined almost 30 percent in the quarter.
In the second quarter, comparable order intake increased 1 percent and includes a 5 percentage-points negative impact related to China.
In Amsterdam, Philips shares were trading at 19.41 euros, down 10.8 percent.
In pre-market activity on the NYSE, Philips shares were trading at $19.86, down 10.3 percent.
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