Price pressure weighs on Philips as split looms

Philips slid to a net loss in the third quarter, weighed down by one-off charges and weak demand in Russia and China: a setback for the Dutch healthcare-to-bulbs group as it pushes ahead with a radical plan to spin off its lighting arm.

Shares in the group fell almost 4 per cent in morning trade on Monday, as investors fretted over price pressure in key markets and an uncertain short-term outlook. Sales in China, for example, were flat on last year.

Philips, which is trying to revive its fortunes by focusing on higher-margin healthcare and tapping emerging economies, warned that soggy demand in Russia and China meant second-half operating earnings could be lower than last year.

But it saw a better 2015 and stuck to 2016 targets for sales growth and margin improvement. – (Reuters)