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Philips issues profit warning

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Philips issues profit warning

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Philips shares slumped after it warned of sharply lower profits at two of its three key divisions and said it would announce cost cuts soon.

Sales were weak between April and June at its lighting and consumer lifestyle units, whose products range from toasters to shavers.

The company, which is also a leading hospital equipment maker, said the impact of selling its TV operations would also hurt earnings.

Philips, the world’s biggest lighting maker and Europe’s biggest consumer electronics producer, said the western European consumer market suffered particularly.

Industry observers doubt Philips can improve its performance quickly. “Concerns about deeper problems within the company could continue to weigh on the shares and it will take time for the new management to turn around the problem businesses,” UniCredit analysts James Stettler and Alasdair Leslie said in a note.