Jun 15, 2001 of the Netherlands (AEX: PHI, NYSE: PHG) announced today that revenues
from its Semiconductors division in the second quarter of this year
are expected to decrease by 20-25% compared with the first quarter as
a result of continuing weakness in its key markets. Fab utilization
will come down to 40-45% at the end of the second quarter.
As a result of lower revenues, reducing inventories and increasing
price erosion in a mostly fixed cost business, Philips Semiconductors
will report an operating loss in the second quarter of approximately
EUR 175 million.
Also, it will take a one-time pre-tax restructuring charge of
approximately EUR 90 million for the transfer of a production line
from Albuquerque to Fishkill, USA.
This charge is in addition to the already announced EUR 350 million
pre-tax charges Royal Philips Electronics will take to address
structurally underperforming activities, in particular in Components
and Consumer Electronics, and to any financial consequences following
a strategic decision concerning the future of the mobile phone
business of PCC, to be taken later this month.
Philips will publish its 2001 second quarter results on July 17, at
07.00 hrs Dutch time.
Ben Geerts, Philips Corporate Communications, tel: +31-20-59 77 215
'Safe Harbor' Statement under the Private Securities Litigation Reform
Act of 1995
This document contains certain forward-looking statements with respect
to the financial condition, results of operations and business of
Philips and certain of the plans and objectives of Philips with
respect to these items.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances
that will occur in the future. There are a number of factors that
could cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements. These
factors include, but are not limited to, levels of consumer and
business spending in major economies, changes in consumer tastes and
preferences, the levels of marketing and promotional expenditures by
Philips and its competitors, raw materials and employee costs, changes
in future exchange and interest rates (in particular, changes in the
euro and the US dollar can materially affect results), changes in tax
rates and future business combinations, acquisitions or dispositions
and the rate of technical changes. Market share estimates contained in
this report are based on outside sources such as specialized research
institutes, industry and dealer panels, etc. in combination with
management estimates.
