Philips was hit by the biggest loss in ten years to increase profit margins

[High-tech LED News] Philips in the Netherlands recently announced that the company's second-quarter net loss of 1.34 billion euros (about 1.9 billion US dollars), suffered the biggest loss in a decade, and expected short-term performance is difficult to improve, so plans to cut another 500 million euros (about With a cost of $703 million to increase 2013 profit margins, it also announced a €2 billion share repurchase program and reduced the value of medical and lighting assets.

Philips pointed out that the Q2 lighting business in 2011 had a total revenue of 1.78 billion euros. Compared with the 1.86 billion euros in the same period last year, Philips said that price pressure and rising raw material costs are the main factors affecting the decline of the company's Q2 lighting business, but sales of LED lighting products increased by 21% compared with the same period last year.

As LED lighting products account for only 15% of Philips' latest quarterly overall lighting sales, equivalent to 267 million euros. Unexpectedly, revenue from Philips LED chip manufacturing subsidiary Lumileds declined. What really worries Philips is that the low-growth forecast of 1.4 billion euros of depreciation spending has led to a net loss of 120 million euros.

Philips CEO Wan Haodun said that the company hopes to increase profits through price hikes. The current weak performance truly reflects the "downturn environment after the crisis." Despite this, the growth of LED general lighting applications has been strong, while Japan plans to purchase new technologies to produce more energy-efficient LED lights to mitigate the impact of power supply restrictions after the earthquake and tsunami.

Due to the slower-than-expected recovery from the economic crisis and the uncertainty caused by the debt burden and austerity measures, Philips has lowered its growth forecast for the lighting market in the next few years.

At present, the popularity of LEDs in general lighting is estimated to be below 5%. Philips will now reduce its compound annual growth rate to 5-7% from the previous forecast of 7-9%. By 2015, the global lighting market will be about 8 billion euros a year, and LED products will occupy half of the market.

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