Dutch electronics giant Philips reported a net loss on Monday morning on weakness in China and Russia, in its first earnings update since it announced plans to spin off its lighting business.
The company said third-quarter sales came in at 5.5 billion euros ($7 billion) with a net loss of 104 million euros. For the same period last year the company reported net income of 281 million euros. Shares opened lower by 2 percent in early deals on Monday.
Philips saw weakness in China and Russia, as well as being negatively impacted by currency strength. It added that it expected to incur around 50 million euros worth of additional restructuring costs between 2014 and 2016.
CEO Frans van Houten was positive on a rebound in China despite gross domestic product figures in the country showing a continued fall from its days of double-digit growth. He said that Philips needed to take care of its trade pipeline in China and expected next year to see better results for its operations in the region.
With Russia, van Houten was a little less optimistic.
"Russia will take a bit longer," he told CNBC Monday. "I really hope there will be diplomatic solutions to the tensions."
In late September, the 120-year-old company announced plans to create a stand-alone lighting business to run alongside its consumer and health-care divisions. This would mean both units would have "dedicated capital market access" with van Houten explaining that he was still very hopeful that the lighting business will enjoy a flotation on the stock market in the near future.
"The separation will take between 12 and 18 months," he said. "It's part of the journey and it's the right time to take the decision."
Although not satisfied with the company's third-quarter results, he did add that its European operations had seen growth and highlighted that its 2016 financial targets had not been changed.
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