Netherlands — Royal Philips Electronics NV announced an unexpected $1.8 billion net loss for their second quarter Monday, the first financial report since transferring its television business into a joint venture 70 percent owned by TPV Technology.

The Netherlands-based company announced an unexpected 1.8 billion second-quarter net loss. Philips – a leader in lighting, health care equipment and consumer electronics –  now plans to cut an additional 700 million in costs, predicting that the company will not make an improvements to its performance anytime soon, Reuters reported.

“We do not expect a material performance improvement in the near term as operational risks and issues remain, and also considering the current uncertain economic environment,” said CEO Frans van Houten, who has only held that position since April.

Their cost-saving program will last until 2014, but the company has no plans to sell or shut down its business as a result of this cutback.

Van Houten said that Philips has amended its medium-term  targets, including increasing sales by 4 percent to 6 percent by 2013 and obtaining margins on earnings before interest, taxes and amortization between 10 and 12 percent, EBNonline reported.

“This gives me confidence. We have a new management since a few months and they indicate that they have completed the internal review process,” said Charles de Kock, asset manager at Delta Lloyd Asset Management.

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