Technicolor warns on profit, to cut 600 jobs

PARIS Dec 19 (Reuters) - French set-top box and DVD-maker Technicolor cut its full-year core profit forecast on Monday and said it would axe 600 jobs as it struggles with a challenging macroeconomic environment in Europe.

The company, which also manages some 42,000 patents, said it now expects 2011 earnings before interest, tax, depreciation and amortisation (EBITDA) to fall 6 percent to around 475 million euros ($620 million).

Technicolor had previously forecast stable or slightly higher adjusted EBITDA for the year after posting earnings of 505 million euros in 2010.

The company said the European market had continued to deteriorate in the fourth quarter, mainly hitting its digital delivery unit, which supplies TV decoders and set-top boxes.

"Based on recent euro zone 2012 GDP (gross domestic product) growth outlooks and conversations with key European customers, the group now expects the weakness to continue throughout 2012," Technicolor said.

"This will principally affect Digital Delivery, with customers continuing to delay capital expenditures and turning to lower-end products."

Technicolor said it expected stable year-on-year revenue growth at constant exchange rates and positive free cash flow this year. It also forecast positive free cash flow for next year.

The company, which has 17,000 staff, added that it would take a pre-tax restructuring charge of 50 million euros in the fourth quarter and an equivalent cash expense next year. ($1 = 0.7665 euros) (Reporting by James Regan; Editing by Christian Plumb)