Royal Philips Electronics Down 32 Million Euro in Q3
Nov 6, 2003
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Royal Philips Electronics NV, Europe's biggest consumer electronics company, says it plans to take a 250-million Euro (U.S. $285.9 million) charge during the next 2 years as part of a previously announced restructuring at its consumer-electronics division, according to a report from The Wall Street Journal.

Philips, headquartered in Amsterdam, The Netherlands, reiterated a previous pledge that streamlining the division's production, research budget, and information technology would help it to generate 400 million Euro in annual cost savings by 2005, according to the The Wall Street Journal report. The consumer electronics division, which accounts for about one-third of Philips' annual sales of 31.8 billion Euro, reported a third-quarter net loss of 32 million Euro in October, according to the report. However, this restructuring would make the division profitable by the fourth quarter.

However, some analysts are skeptical as to whether restructuring is really the best measure to take, especially during the current worldwide economic decline and the slump consumer electronics is experiencing globally because of less-expensive imitation products on the market from Chinese manufacturers. Instead, the analysts are advising Philips to downsize its personnel and facilities. "These measures are just enough to keep up, but not enough to get Philips ahead of the competition," Eric de Graaf, an analyst at ING in Amsterdam, told The Wall Street Journal.

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