Philips (NYSE:PHG) reports a net loss of €104M for the quarter ending Sept. 30, compared with a €282M net profit in the same period in 2013.
The Dutch technology company missed analyst estimates due to several factors, including unfavorable exchange rates, sluggish demand in Europe and China, and the continued fallout from sanctions against Russia.
Philips' results were also hit by a $467M charge after losing a legal battle to Masimo, which accused Philips of infringing on tech patents.
A Delaware jury has ruled Philips (PHG -2.2%) should pay Masimo (MASI +12.9%) $466M for infringing patents related to fingertip devices that measure blood oxygen and pulse rates. It also cleared Masimo of infringing a Philips patent.
Philips will almost certainly appeal the ruling, which has led Masimo shares to soar.
Masimo originally sued Philips in 2009. Philips has been arguing Masimo's patents are invalid due to the obviousness of the technology, and because the patent filings were poorly written.
Philips (NYSE:PHG) reports that Q2 net profit fell 23% due to unfavorable exchange rates and the suspension of its health care plant in Cleveland, but countered that earnings should increase in the second half of the year compared with the same period last year. Net profit fell to €242M vs. €317 a year earlier.
Sales fell 6% Y/Y to €5.29B. Sales were flat on an annual basis, with 7% growth at Philips's consumer electronics business, 1% sales growth in the lighting business and a 3% drop in sales at its health-care business.
Philips' (PHG) CEO of its health-care division, will leave the company immediately, after the division's weak second-quarter performance. The unit will now report directly to Philips CEO Frans van Houten.
"Today's announcement is an example of how we are taking decisive action to improve our performance and competitiveness, and demonstrates our relentless commitment to quality and meaningful innovation that meet the needs of our customers," says van Houten.
The company also announced that its health-care division will report less than expected second-quarter earnings, although overall earnings will still be in line with forecasts.
Both Philips (PHG +4%) and Cree (CREE +3.4%) are up strongly after Philips announced it's merging its Lumileds LED component unit with its automotive lighting business to create a standalone company, and will "explore strategic options to attract capital from third-party investors for [the] business."
The move could be fueling hopes Philips will try to merge the unit with Cree, which competes against Lumileds in an LED component market that has seen intense price competition. As it is, Cree has often been the subject of M&A rumors (some of them involving Philips).
Philips, for its part, argues spinning off Lumileds and automotive lighting will help them grow sales to customers who currently view Philips as a rival. The company adds its internal lighting business will be focused on system/lamp sales going forward, and that it's open to an IPO for the spinoff.
Philips (PHG) and Salesforce (CRM) have announced a new partnership in which they will work towards developing a new platform of cloud-based healthcare information technologies. The platform will boost medical device and data interoperability, and seeks to enhance patient relationship management.
The two companies have already worked together to produce Philips eCareCoordinator and Philips eCareCompanion, which will be released later this summer.
Gibson Brands is buying Philips' (PHG -1%) Woox Innovations unit, a maker of headphones, home entertainment systems, and other A/V hardware, for $135M + a brand license fee. The deal is expected to close in 2H14.
Philips says the sale is part of its efforts to transform into "a leading technology company in health and well-being." The company will hold onto Woox's video hardware ops until 2017, and provide its products to Gibson through a distribution agreement.
Philips (PHG) Q1 net profit fell to €137M ($189M) from €162M a year earlier as sales dropped 5% to €5.02B, hurt by currency losses, a decline in sales at the company's health-care business, and headwinds in China and Russia.
Adjusted EBITA fell 13% to €368M, missing consensus of €413M.
CEO Frans Van Houten said 2014 "will be a challenging year," but the company remains "very confident" of achieving its 2016 targets. Van Houten believes that Europe has "fully bottomed out" and is starting to pick up.
However, Chinese sales had less momentum, Van Houten said, and grew just 5% in Q1. (PR)