Stock markets are bracing themselves for bad news from Royal Philips Electronics NV after the announcement that Scott McGregor will quit his position as CEO of the semiconductor division and return to the US.
Even though the company emphasized that McGregor was leaving at his own request, and Philips’s CEO Gerard Kleisterlee paid tribute to his achievement in turning the unit around during a difficult period, Philips shares fell in anticipation of a possible downgrade in outlook for the Amsterdam, Netherlands-based company.
The company is about to update the market on its third-quarter performance, and given the problems encountered by other chip companies, there are fears that Philips has encountered difficulties.
So far this year, the semiconductor unit has performed well. In its second quarter to June 30, semiconductor sales rose 28% to 1.41bn euros ($1.73bn) and the wafer-fab utilization rate rose to 99%. The company forecast low-single-digit sequential increase in segment revenues in the third quarter and the big fear is in more difficult conditions, it will report flat sales.
McGregor, who has headed the chip division since September 2001, will be replaced by the head of the consumer electronics division Frans van Houten.