Reuters - Philips said currency volatility in emerging markets such as Turkey, Argentina, and Indonesia and weak orders for healthcare equipment would mean a slow start to the year.

Shares in the Dutch healthcare, lighting and consumer appliances company fell more than 2 percent as it warned of a tough year ahead and flagged turmoil in the currency markets as a particular concern.

The stock later recovered to trade up 0.3 percent at 26.565 euros at 0845 GMT, buoyed partly by better-than-expected fourth-quarter earnings.

Long known for its audio and video products, Philips was unable to fend off competition from low-cost Asian rivals and instead shifted its focus to fast-growing healthcare equipment and energy-efficient lighting as part of a broad restructuring.

After a big push into countries such as China, India, and Russia over the past couple of years, more than a third of its sales now come from developing world economies.

"What worries me are the currency fluctuations and the unrest in some of the countries, for example Turkey, or the peso in Argentina and the rupiah in Indonesia," Chief Executive Frans van Houten told Reuters Insider in an interview.

"These are of course facts of life that we have to live with. I am cautiously optimistic for the long-term economic development. It's just that in the near term we do see several headwinds."

The currency turbulence has forced Philips to look at ways of staggering payments for orders, for example with customers paying for lighting systems out of their energy savings, van Houten said.

"Philips' outlook indicates that margins will not show a strong further recovery in 2014," ING analyst Robin van den Broek said in a note to clients.

Philips reported better-than-expected fourth-quarter earnings before interest, tax and amortisation (EBITA) and met its full-year financial targets, thanks to improvements at all its businesses after two years of cutting costs, selling weak businesses, and targeting its new products at emerging markets.

It has launched new and updated products, from electric toothbrushes and air purifiers to ultrasound equipment used in hospital emergency rooms.

Healthcare, now the biggest of Philips' three businesses, reported a 1 percent dip in order intake in the quarter because of weak demand in its main markets, reflecting uncertainty over healthcare reforms in the United States and austerity measures in Europe.

Fourth-quarter EBITA was 884 million euros ($1.2 billion), compared with a loss of 50 million euros a year ago. The company turned to a net profit of 412 million euros from a year-ago loss of 420 million euros. Sales rose 7 percent on a comparable basis to 6.8 billion euros.

Analysts in a poll commissioned by Reuters had forecast net profit of 455 million euros and EBITA of 839 million euros on sales of 6.8 billion euros.