Philips Lighting NV shares fell sharply in early Friday trading despite what the group posted what it called "solid" quarterly earnings and holding onto its full year guidance.
Shares in the world's biggest lighting company, which builds systems that link to voice-activated home technology platforms such as Amazon's (AMZN) Echo and Apple's (APPL) HomePod, were marked 6.4% lower in the opening 30 minutes of trading in Amsterdam, the biggest single-day decline in at least three years, to change hands at €30.70 each and erasing nearly all of its gains for the past three months. The group said its key U.S. market remains "soft ... particularly for small-to-medium sized projects."
Philips said operating profit for the three months ending in June rose 8% on an adjusted basis to €174 million ($202 million), firmly ahead of analysts' forecasts of €160 million. Sales, however, slipped 1.8% from the same period last year to €1.7 billion.
"In the first half of the year, our growth profile improved and our profitability continued to increase. This demonstrates the successful implementation of our strategy and reinforces our confidence that we are on track to achieve our outlook for 2017," said CEO Eric Rondolat.
The group expects operating margins to improve between 50 basis points and 100 basis points, although the quarter-on-quarter gain was only pegged at 10 basis points in Friday's earnings release.
Home lighting sales, which include the voice-activated links, grew 14.9% from the same period last year to €127 billion, Philips said, although operating profits were only €10 million.