Embattled management at the Netherlands’ tottering giant Philips NV will announce another major restructuring of the company on July 2 in response to the company being wrong-footed yet again. Only last month, board member Henk Appelo was saying that the second quarter would be better than the company’s rotten first quarter and that there would be a real improvement in the second half. Those hopes were dashed with the announcement yesterday that second quarter profit will be considerably lower than the $100m or so reported a year ago, and that profits for the full year would be at a very low level against almost $400m for 1989. At the heart of the company’s problems is its ravaged computer business, and yesterday’s announcement suggests that the termination of the talks with Ing C Olivetti & Co SpA was called by the Italian after it took a detailed look at the business. Yesterday’s announcement that the company had been taken by surprise againt will increase the pressure on Philips either to sell its $1,100m-a-year computer business outright, or to close it altogether.
Content from our partners
