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Philips CE Biz Reports 18% Q3 Sales Drop

10/16/2001 03:34:00 PM Eastern

Amsterdam, The Netherlands - Blasted by sales declines in VCRs, audio, monitors, set-top boxes and mobile phones, Royal Philips Electronics posted an 18 percent decrease in consumer electronics sales during the third quarter.

CE segment revenue dropped to $2.40 billion, down from $2.93 billion in the same quarter in 2000. The negative effect of currency movement reduced sales even further in the three months, down another 2 percent to $2.36 billion.

Philips said that CE unit sales volume was 2 percent lower in the third quarter, while average prices - faced with particularly strong erosion in monitors - dropped 14 percent. All regions, except Europe, posted considerable decreases in CE sales. However, sales in DVD sustained strong growth, said the company.

A lower operational performance in North America, as well as an $68.1 million charge for restructuring projects, turned a $89 million profit from operations in CE in the third quarter of 2000 into a $40.9 million loss from operations during the current three months.

Sales in mainstream CE electronics dipped 13 percent in the third quarter, reaching $1.86 billion, compared with $2.11 billion in the year-ago period. Philips reported a $93.6 million loss from operations in mainstream CE during the third quarter, down from a $39.1 million gain in the same quarter last year.

For the nine months CE segment revenue dropped about 14 percent to $7.24 billion, compared with $8.37 billion in the same period in 2000. The CE segment recorded a loss from operations of $583.2 million for the nine months, down from a gain of $278.9 million in the same nine months last year.

Mainstream CE sales came in at $5.54 billion during the nine months, about a 6 percent dip from the $5.93 billion registered in the year-ago period. Mainstream CE reported a loss of $193.5 million for the nine months, compared with a profit of $58.1 million in the same period in 2000.

Overall sales at Philips dropped 23 percent in the third quarter, hitting $6.53 billion, down from $8.51 billion in the same three months last year.

Net income in the third quarter amounted to a loss of $725.8 million, compared with a profit of $1.88 billion in the year-ago third quarter. Excluding charges, net income in the third quarter came to a loss of $411.5 million, compared with a profit of $700.4 million in the same three months last year.

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