Updated from 3:59 a.m. EDT
Dutch electronics conglomerate
reported a first-quarter loss of 59 million euros ($78 million) as sales fell to 5.1 billion euros from almost 6 billion euros a year earlier.
Earnings in the year-earlier quarter were 294 million euros.
Philips is among the first of Dutch blue chip companies to report earnings, and its outlook will be fodder for analysts and investors looking for signs the global economic downturn is easing. However, the company provided no hint of seeing any recovery in the report.
In a statement Tuesday, Philips said it saw further deterioration in its markets during the quarter, particularly in activities that cater to the consumer and construction and automotive industries. The company also said health care is now impacted and it doesn't see a material change in the second quarter.
The company said first-quarter EBITA, or earnings before interest, taxes and amortization, swung to a loss of 74 million euros from a profit of 265 million euros a year earlier.
Philips said reductions of its fixed cost base have "progressed well in the first quarter" and are now "expected to exceed 500 million euros on an annualized basis by the end of this year with a further acceleration of restructuring in the second quarter," especially in its lighting division. The company had previously targeted cost cuts of 400 million euros.
Among Philips' major divisions, it showed a 19% fall in lighting sales, a 2% fall in sales of health care equipment, and a 25% decline in consumer electronics sales.
Philips said the market for health care equipment, usually seen as insulated from economic downturns, had worsened in developing countries. Sales of health care equipment rose in developing countries, but margins worsened everywhere.
The company noted that with auto sales continuing to be weak -- automobile makers are a major buyer of its lights -- the outlook for 2009 is not improving.
"Ongoing deterioration in the global economy during the first quarter has resulted in weaker demand in our key markets than previously anticipated," Philips said, adding that it expects demand in the second quarter "to be broadly in line with the first three months of 2009.">P/>Philips said it was "accelerating" previously announced cost-cutting moves. The company cut 7,000 jobs in the fourth quarter to end the year with 121,000 workers, and then announced plans to shed 6,000 more.
Philips said Tuesday it had reduced its work force by 5,600 in the first quarter.
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