Philips

on Monday surprised with a 1.3 billion euro quarterly net loss, citing a slower-than-expected recovery from the recession and impairment charges, and said it will cut costs by 500 million euros.

Philips

last month warned of sharply lower second-quarter profits and slowing sales growth at both its lighting business and the toasters-to-shavers consumer division, citing weak consumer demand in Europe.

Europe's biggest consumer electronics maker said in a statement it took writedowns at its healthcare division and lighting division, leading to a 1.4 billion euro impairment.

Our second-quarter results were impacted by near-term operational challenges, weaker markets and a significant impairment charge, Philips CEO Frans van Houten said in a statement.

The company will launch a 500 million euros cost savings program and a 2 billion euro share buy-back program.

(Reporting by Gilbert Kreijger; Editing by Sara Webb)