Philips has posted a £81 million net loss on its third quarter earnings only three weeks after its announcement of intentions to split from its lighting division.
Philips has blamed this loss on slowing markets in China and Russia and a £290 million patent law suit in its healthcare division.
Comparably,lighting sales declined 1% Year on Years but LED based sales increased by 28%. This was counteracted by a 14% decrease in overall conventional lighting sales. The LED lighting division in Philips now represents 40% of total lighting sales, compared to 30% this time last year.
On the 28th September, the dutch giant made public its decision to split off its lighting business to focus on its high margin consumer and healthcare divisions. The separation will result in the creation of two new companies, Lighting and HealthTech, but these will both continue to use the Philips brand.
A Philips spokesperson for Philips has denied that the announcement of the split was to distract shareholders from the disappointing third quarter losses, 'We are talking about two separate things', stated the spokesperson, 'One is the strategic announcement to do something that we think is in the best interests of both entities of the business. And the results are a snapshot of something that we do every quarter as a listed company you have to.'
They continued, 'As our CEO said, we're not satisfied and if you look at the numbers it's clear that you cannot be satisfied. But having said that, if you look at the numbers there are lots of incidents in there. If you exclude those, we do see some improvement in the underlying business.'
The growth in LED sales and the considerable fine for the Philips healthcare division might seem ironic given Philips has decided to move away from lighting to focus on healthcare.
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