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PHG: Harbinger of things to come?

October 17, 2011

The world’s largest lighting maker, Philips announced this morning it would cut 4,500 jobs after an 86% slump in net profits in Q3, largely due to higher raw material costs. While still a beat of analyst earnings projections, the job cutting bit is a nasty surprise. Look for PHG to open lower.

Why is this important?

I’m not saying get short PHG. Beta isn’t huge for this stock, and this news will largely be factored in. This is important because of what it signals for Q3 earnings and the global chill we’re entering. High raw material costs signify that real estate is in trouble.

See here: Philips cutes 4,500 jobs










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