Market expectations missed: Philips share: Philips suffers a net loss in the billions in the third quarter and wants to cut 4,000 jobs “immediately” | news

Market expectations missed: Philips share: Philips suffers a net loss in the billions in the third quarter and wants to cut 4,000 jobs “immediately” |  news

The Dutch health technology group cites ongoing operational challenges and supply chain problems as reasons, as well as a deteriorating macroeconomic environment. There are also ongoing uncertainties in China in connection with corona measures. However, these are likely to be partially offset by productivity and pricing measures, the company said.

The net loss was 1.33 billion euros compared to a net profit of 2.97 billion euros in the same period last year. According to a consensus from Factset, analysts had only expected a loss of 838.4 million euros.

Adjusted earnings before interest, taxes, depreciation and amortization – a metric that eliminates exceptional items – were 209 million euros, compared to 512 million euros a year earlier. The company had already forecast adjusted EBITA of around EUR 210 million in mid-October. Sales were 4.3 billion euros after 4.2 billion previously. On a like-for-like basis, revenue fell 5 percent, in line with initial estimates.

For the fourth quarter, Royal Philips now expects comparable sales to decline in the mid-single digits and an adjusted EBITA margin in the high single-digit to double-digits.

The group announced that it intends to take cash management measures and secure a €1 billion credit line.

Philips wants to lay off 4,000 employees “immediately” after the loss

In view of current problems, Royal Philips wants to cut 4,000 jobs “immediately”. CEO Roy Jakobs announced the reduction in a shareholder announcement. The company is “facing numerous challenges and our results reflect this”. The Dutch medical technology group reported an unexpectedly high loss for the third quarter in the morning.

Philips wants to strengthen the issues of patient safety and quality management, including the causes that led to the recall of ventilators. The functioning of the supply chain is also “urgent”. Of the downsizing will help improve the company’s productivity and agility, Jakobs said.

BARCELONA / AMSTERDAM (Dow Jones)

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