Electronics megalith Philips has given a decidedly cautious outlook for its fourth quarter earnings, citing a frail consumer confidence level as the main obstacle for growth.
Despite the shopping season rapidly coming upon us, and the fact that thousands will end up with a Philips shaver or something akin in their Christmas stocking, Philips Electronics has still posted the conservative outlook amid lingering uncertainty in the economy.
Philips shares dropped to 22.92 euros, a slump of 4 percent as the company announced that third quarter profits had tripled from the same time last year, going up by 197 percent to reach nearly $730 million, beating all expectations.
Investors were instead looking at the unhappy outlook posted by the electronic behemoth, which also sells medical equipment and is the world’s largest makers of lighting. Soon-to-be ex CEO Gerard Kleisterlee said that the outlook was the result of "a still fragile economic environment, with weak consumer markets in the developed economies."
The company noted that the fourth quarter would of course benefit from the seasonal shopping, that would probably be offset by destocking by customers as well as softening in the construction sector.
The company has said it is being cautious because consumer confidence is ‘scattered’ and there are continuing uncertainties in the economy which prompted the company to take a wary outlook. "We take a cautious view on revenue development in Q4 2010," said a statement from Philips.
Philips’ largest rivals in the electronics sectors include Siemens and General Electric.
