Thomson's Q3 Sales Drop 21%
By Jeff Malester -- TWICE, 10/22/2001
Paris — Influenced by the decision to focus on maintaining its value market share, while limiting price erosion as much as possible during the current uncertainty in the global environment, third-quarter revenue in the Consumer Products division at Thomson Multimedia took a 21 percent hit.
By emphasizing profitability, rather than revenue growth, sales in the Consumer Products segment, by far the company's largest, dropped to $1.26 billion, down from $1.61 billion in the same three months last year.
Thomson said inventory control among North American retailers, especially during July and August, was particularly tight. Inventories, however, returned to more normal levels as of early September.
Television and video sales were particularly impacted by a downswing in the economy and global fears exacerbated by Sept. 11.
However, Consumer Products continued to benefit from the sales growth of some digital categories, said Thomson. Sales of high-definition televisions doubled in the United States, while audio and communications products continued to gain American market share.
Sales in broadband access product, such as set-top boxes and cable modems, amounted to 1.6 million units. Set-top box sales to DirecTV were slightly higher than expected.
While Thomson continues to roll out its worldwide brand strategy for TV/Video, repositioning toward high-end segments, the company confirms its priorities in 2001 remain operating income and cash.
Against a projected outturn in revenue of between $9.3 billion and $9.7 billion for the full year, the company expects to attain Earnings Before Interest and Taxes (EBIT) margin of between 6 percent and 6.5 percent.
Total company revenue for the third quarter inched up 1.8 percent, reaching $2.16 billion, compared with $2.13 billion in the year-ago three months.
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