Title Philips decline despite forecasts raised
Philips has released better than expected results for the sixth consecutive quarter and raised its margin target, but not so far succeeded in convincing the market hoped for more.
Around 9:15 GMT, the Dutch electronics group fell by 2.91%, to 24.175 euros after plunging 4.3% in the first exchanges to form when the largest decline of the Amsterdam Stock Exchange.
Victor Bareno, an analyst at SNS Securities, said that the published results did not reflect "the significant increase that Philips had reported in previous quarters.
The group recorded a profit before interest, taxes, depreciation and amortization (EBITA) of 527 million euros in the second quarter, against 118 million euros last year and 486 million euros expected.
Its turnover stood at 6.2 billion euros and net profit to 262 million euros, higher than the 241 million euros expected.
Analysts had warned before the publication of Philips that investor expectations may be too large.
"The magnitude of the excess (of analysts' forecasts) compared to the previous five quarters is somewhat less strong," said Jan Hein de Vroe, an analyst at ING.
Eleven of 13 analysts surveyed by Thomson Reuters StarMine SmartEstimates lowered on average by 22.6% their earnings expectations over the past 30 days, while the stock has gained almost 7%.
The Dutch consumer electronics was confident of being able to exceed its margin target of 10% EBITA before exceptional items this year, while previously thought just to reach this goal.
The European leader in consumer electronics has reduced the cost during the crisis and the beginning of economic recovery, which helped to generate profits even in difficult times.
Philips has hoped to exceed its savings target on its structural costs in 2010 to 700 million euros.