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Philips quits home entertainment

Philips quits home entertainment
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Philips Chief Executive Frans van Houten is continuing his efforts to focus on its more profitable home appliances and healthcare operations.

As consumers increasingly get music, films and games online rather than buying CDs and DVDs, he is selling Philips audio and video business to Japan’s Funai for 150 million euros.

Van Houten said that business was shrinking and “margin dilutive”. “This completes the repositioning away from consumer electronics,” he added.

Last year Philips hived off its troubled television business through a joint venture with Hong Kong-based TPV.

The decision to get out of home entertainment pleased analysts and the Dutch group’s shares rose.

Philips, which will also receive licence fees from Funai, reported a fourth-quarter net loss of 355 million euros – widening from a year-ago loss of 160 million euros. That was because of provisions and charges which it had previously warned about.

The group had already said last month that it would take a provision of 509 million euros to cover an European Union fine for cartel practices in its television business, and that restructuring charges would be higher than previously estimated.