Philips’ profits slump 63% in Q1 on high tax bill
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ELECTRONICS giant Philips yesterday posted a 63 percent slump in first-quarter profits for 2016, blaming the fall on a high tax bill incurred for a major company restructuring.
It also confirmed its lighting branch, which is being separated from the company’s other activities, would “likely” be floated on the stock market.
A household name around the world for home appliances, Philips said it had earned 37 million euros (US$41.5 million) in net income for the first quarter, compared with 100 million euros in the same period in 2015.
The Amsterdam-based company has re-oriented its range of activities in recent years to focus more on advanced lighting technology and on medical technology where margins are strong and less vulnerable to competition from emerging markets.
The restructuring of the company, which employs some 106,000 people around the world, is expected to be completed this year.
Philips said yesterday that overall sales rose 5 percent to 5.5 billion euros.
But costs related to the separation for the first three months of 2016 had reached 52 million euros.
Philips sold its first light bulb a few years after it was founded in 1891, but for the past dozen years has focused on medical equipment, which now accounts for more than 40 percent of sales.
It abandoned its television production business a few years ago, bowing to Asian competition.
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