Philips issues profit warning

Philips - which will report fiscal figures on January 30, 2012 - said that free cash flow for 4Q would be EUR 1 billion compared with EUR 1.2 billion a year ago. Group cash balance at the end of the quarter is expected to be approximately EUR 3 billion. The reported EBITA for the group is estimated to be around EUR 500 million (EUR 662 million a year ago). “Our expected fourth quarter financial results have been affected by the weakness in Europe, which has impacted our Healthcare business, as well as pricing in our Consumer Lighting business,” said Frans van Houten, CEO of Philips. “We have taken measures to address our inventory situation in the Lighting business, which also had an impact on earnings for the quarter. Our Consumer Lifestyle business, which was the first to start implementing the Accelerate! change and performance improvement program, is beginning to show early signs of improvement. While we are disappointed with the results, we are confident that by continuing to execute on our change plans, and delivering on our cost reduction plans, we will improve the operations of the company and achieve our 2013 mid-term financial targets of 4-6% sales growth, 10-12% reported EBITA, and 12-14% ROIC", he continued.