Philips has suffered a 28 per cent drop in profits after its core television business was hit hard by increasing losses; down €51 million in losses to €95 million.
The firm, which recently pull out of the US television market, said that the credit crunch was increasingly putting pressure on its consumer operations and that it expected a continued softening of 'mature economies' such as consumer electronics.
Philips' chief executive Gerard Kleisterlee told The Times: "Unfortunately our results are clouded, more than we like, by the adverse situation in our TV business, significantly lower incidental license income and some acquisition-related charges."
Kleisterlee, however, stressed that despite deepening losses, the company had no plans '"or the time being" to pull the plug on its European television operations, describing it as a "stronger business".
The sharp fall in profits comes after it pulled out of much of its electronics interests last year to focus more on its lighting and healthcare businesses.