Philips Shares Drop After Q3 Results

Royal Philips NV (NYSE: PHG) posted a net loss in the third quarter.Philips swung to a quarterly net loss of EUR104 million ($132 million), versus a year-ago net profit of EUR282 million. The latest quarter results included charges of EUR 366 million related to the jury verdict in the Masimo litigationIts sales declined 0.9% to EUR5.55 billion from EUR5.6 billion. Healthcare comparable sales rose 1% y/y, while consumer lifestyle comparable sales gained 5%.Lighting comparable sales fell 1% y/y, while LED-based sales surged 28%.Philips' earnings before interest, taxes, amortisation and one-time items fell 16% to 536 million euros ($684 million).Operating margins, before charges, narrowed to 9.7% from 11.4% of sales.The number of employees rose by 1,590 y/y.Frans van Houten, CEO, said, “As we manage through a challenging 2014 and given a number of incidentals, we are not satisfied with our overall performance in the third quarter. We are facing sustained softness in a number of markets such as China and Russia. We were also confronted by an adverse jury verdict with a surprisingly high proposed award in the Masimo litigation, which we will appeal. On a positive note, production at our Cleveland facility is ramping up.”Philips shares dropped 3.60% to $27.06 in pre-market trading.