Exchange rate changes pose challenges; Philips has cautious outlook

Philips Electronics pointed out that the strong euro will make 2014 a challenging year, and Philips' first-quarter profit was not as good as analysts forecast.

The strong euro has put pressure on growth as revenue outside Europe loses value when repatriated. Philips CEO Frans Van Houten said: "The euro has become stronger." He pointed out that currency changes had a greater than expected impact on Philips in the first quarter. The Van Houten plan allows Philips to focus on more profitable LED lighting, health care equipment and health products after selling its DVD and multimedia businesses.

Philips issued a statement saying: "2014 will be a challenging year, but we are still very confident that we can achieve our mid-range financial goals for 2016." Philips said in its financial report that profits before interest, taxes, amortization and one-time items fell 13% to 368 million euros. The average forecast of analysts polled by Bloomberg was 413 million euros. Revenue fell 5% to 5.02 billion euros.