April 26, 2018 / 5:48 AM / 24 days ago

CORRECTED-UPDATE 2-Philips Lighting shares tumble after Q1 earnings miss

(Corrects “suppliers” to “resellers” in paragraph 8)

* Q1 EBITA 106 mln euros vs forecast 129 mln euros

* Due mainly to weakness in Home division

* Shares drop 10 percent

By Toby Sterling

AMSTERDAM, April 26 (Reuters) - Shares in Philips Lighting fell sharply on Thursday after the world’s largest lighting maker reported worse than expected first-quarter earnings due to falling sales and margins, especially in the United States.

Philips, which flagged in February its quarterly earnings would be weak, made adjusted earnings before interest, taxes, and amortisation (EBITA) of 106 million euros ($129 million), down from 127 million euros in the same period a year ago.

Analysts polled for Reuters had seen EBITA rising to 129 million euros.

At 0730 GMT, Philips shares were down 10.1 percent at 27.00 euros.

The drop in earnings was “mainly due to a weak performance in Home, most notably in the United States,” said CEO Eric Rondolat in a statement, referring to a division that focuses on newer technologies in lighting such as its Hue line of networked LED lights that can be adjusted by mobile phone.

EBITA at its traditional lamps business, which is highly profitable but in long-term decline, fell to 78 million euros from 100 million a year earlier, as better margins could not compensate for a 24 percent drop in sales.

Group sales fell 3.5 percent to 1.50 billion euros, while EBITA margins slipped to 7.0 percent from 7.5 percent.

On a call with reporters, Rondolat said the weakness at the Home division came after resellers had built up excess inventory for the holiday season and were working through it - the reason for the February warning.

“Our other three businesses (lamps, LEDs and professional lighting) further improved their operational profitability,” particularly the professional division, Rondolat said.

ING analyst Marc Zwartsenburg said in a note the results made “the investment case weaker as Professional and Home lighting are the future growth drivers.”

He repeated a “hold” rating on the shares.

Bright spots in the earnings included a note that declines in LED prices are slowing. The company also kept its full-year forecast for EBITA margins of 10-10.5 percent, with growing sales.

$1 = 0.8214 euros Reporting by Toby Sterling; Editing by Shri Navaratnam and MarkPotter

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below