Philips posts Q2 loss on asset depreciation

Philips, which makes household electrical and medical equipment, reported a net loss of 1.35 billion euros ($2.8 billion) for the second quarter, mainly because of asset depreciation, the group said on Monday. The group booked depreciations totalling 1.39 billion euros in the second quarter. It also announced that it would spend 2.0 billion euros on buying back its own shares over the next 12 months, saying that this reflected its confidence in the prospects for growth. The firm also announced a programme to reduce costs by 500 million euros, and said it intended to raise sales by 4.0 to 6.0 percent by 2013. Executive director Frans van Houten said: "We do not expect a material improvement in the near term as operational risks and issues remain, and also considering the current uncertain economic environment." Markets for products made by the group also weakened, Philips said. The loss compared to a net profit of 262 million euros in the same period of last year. Philips said that the television division had made a net loss of 97 million euros, but that it had not included this in the second-quarter results. The group said on April 18 that it had sold this business. Sales in the second quarter fell by 2.0 percent to 5.21 billion euros but rose by 4.0 percent on a constant asset basis. Philips, which employs 120,000 people, was centred for decades on making televisions and electrical devices for the home. About 10 years ago it began developing a medical equipment division, providing such material as scanners and lighting systems.