twice connect
careers

Thomson Consumer Products Segment Sales Flat

7/22/2004 10:14:00 AM Eastern

Paris — The consumer industry and consumer solutions business segment at Thomson recorded essentially flat revenue in the second quarter, compared to the second three months of 2003, coming in at about $1.3 billion.

Excluding currency movements, sales in the consumer businesses segment grew by 6.2 percent, but sales were up only 1.9 percent when currency movements are included. When perimeter effects — such as $89.5 million in added sales from Thomson’s Recoton accessories business integration and added revenue from the consolidation of picture tube lines — are excluded, consolidated net sales in the consumer businesses segment showed a second-quarter decrease of 1.1 percent.

Revenue in the consumer businesses, excluding television, was off 1.2 percent in the second quarter, excluding currency movements. Mobility and portable products and communications devices accounted for 30 percent of the segment’s sales in the second three months, while the television business contributed 38 percent.

Thomson’s worldwide tube production reached 4.8 million units in the second quarter, reflecting strong growth in China. However, licensing revenue declined to $74.8 million in the period, compared with $127.5 million year-on-year, reflecting adverse currency movements and the comparison to a strong second quarter in 2003.

For the first half, the consumer businesses segment also recorded flat revenue, compared with the first six months in 2003, coming in at about $2.5 billion

Overall, the consumer solutions business segment reported a first half operating loss of $1.2 million, compared with operating income of $12.3 million in the first six months a year ago.

Consumer activities in the segment show an operating loss for the first half of $39.2 million, a narrower amount than the $81 million reported year-on-year.

Television was a loss-making category in the first half, ended June 30, said Thomson; although the company said the loss was substantially lower than a year earlier, which reflects a positive impact from previous restructuring and an improved product mix. Other consumer activities were profitable in the first half, said Thomson.

The company’s component activities, also part of the consumer solutions business segment, reported a $39.2 million operating loss in the first six months, down from a loss of $99.3 million in the same period in 2003. The major part of this loss reflects mainly U.S. tube activities, now discontinued since the closure of two manufacturing plants.

First half EBITA loss for the consumer solutions segment, which Thomson defines as earnings after restructuring — but before financial charges, tax and amortization — more than doubled, reaching a negative $187.5 million, up from a year-over-year EBITA loss of $87 million.

Restructuring costs and write-offs of fixed assets in the first half for the consumer solutions segment hit $170.4 million, compared with $99.3 million in the first six months the previous year. The increase was due mainly to closure of the two U.S. tube plants, while other non-current expenses in the period reached $15.9 million in the first half of this year, compared with $1.2 million last year.

Consolidated Thomson sales climbed to $2.5 billion in the second quarter, up from $2.3 billion in the year-ago period. At constant currency, the increase was 10.3 percent, hitting $2.6 billion.

For the first half, consolidated sales increased to $4.7 billion, compared with $4.6 billion in the same six months a year ago. At constant currency, first half sales reached $5 billion, an 8.2 percent increase over the year-ago figures. Sales grew by 2.5 percent, including currency movements

First half consolidated operating come came in at $179 million, up from $170.4 million in the first half of 2003, or a 5.1 percent increase. The consolidated net loss, however, widened to $231.7 million, more than double the net loss year-over-year of $112.8 million. Restructuring charges and write-offs of fixed assets of $205.9 million in the first half, compared with $144.6 million in the year-ago period, had a major impact on the jump.

Want to read more stories like this?
Get our Free Newsletter Here!