Philips short of analysts' expectations

Blames US slowdown, like everyone else

Philips is the latest technology company to announced a disappointing Q4 last year. Despite reporting a 46 per cent rise in income, the figure of $744.7 million still missed analysts' expectations.

The company had been expected to report income of between $797.95 million and $1.082 billion for the quarter.

The electronics manufacturer blamed the slowdown on lower demand for computer chips, and said that the trend would continue into the first quarter of 2001. It predicted a 15 per cent fall off in chip sales in this quarter compared to Q4 last year.

The industry as a whole is certainly struggling, and most companies are pointing the finger at the cooling US economy. As Americans keep a closer eye on their cash, demand for semiconductor based products has dropped.

However, unsurprisingly, Philips was keen to play down the missed targets, and talk about performance throughout 2000, saying it was a record year.

It said it is raising its targets for 2001, and is aiming to grow sales another ten per cent. It would not be drawn to make a forecast for the year in general, saying it was being more cautious this year.

Steven Vrolijk, an ING Barings analyst in Amsterdam, commented: "The outlook on the semiconductor sector is disappointing."

He told Bloomberg that his forecast of five percent net profit growth for Philips over the next year, was unchanged. "This morning's figures don't point to any drastic change in that outlook. Five percent growth is not very impressive for a group like Philips," he said. ®