Philips Electronics NV could announce this week plans to scrap its consumer communications joint venture with Lucent Technologies Inc. A decision about the fate of Philips Consumer Communications is expected Thursday, when Philips Electronics is scheduled to release its third-quarter earnings.
The company Sept. 21 issued an earnings warning that indicated the joint venture was expected to have significantly higher losses and that the parent companies planned to initiate a review of PCC. Philips said results of the review would be released in four weeks.
After publicly stating that it intended to be among the top three handset vendors, PCC has been plagued by bad news, including disappointing financial results and late products. Several senior officials at the company have exited during the last year, including Mike McTighe, PCC’s president and chief executive officer.
Late last week, Philips announced the resignation of Doug Dunn, chairman and CEO of the company’s Consumer Electronics Division and a chairman of PCC. It is unclear whether Dunn’s departure is related to the turmoil surrounding PCC.
The company has acknowledged having difficulty marrying the two companies. A spokesman for Lucent said, “As Philips has indicated, they are examining all options with regard to Philips Consumer Communications and are expected an announced a decision (this week). Lucent is working with them in that process, and it would be premature to comment any further on the matter.”
Philips did not return calls by RCR press time.
