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Brighter outlook for Philips asprofits soar despite sales fall
By Toby Sterling |
October 13, 2009, Tuesday
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Print Edition
Print Edition
ROYAL Philips Electronics NV reported net profit of 174 million euros (US$256 million) for the third quarter yesterday, three times the depressed levels of a year ago.
In the same period in 2008, the world's largest lighting manufacturer had reported profits of 57 million euros.
Despite the increase in profit, the company said sales fell 11 percent to 5.62 billion euros in the third quarter of 2009, as demand continued to lag for consumer electronics, high-end health care equipment and many kinds of lights, notably those used in the automobile industry.
Philips added it had not seen "structural recovery in the majority of our end-markets."
The company's Chief Executive Gerard Kleisterlee said: "Most businesses across the company saw further improvement in both comparable sales and underlying earnings compared to the previous quarter."
Analysts said the results beat expectations and shares rose 5.7 percent to 18 euros in Amsterdam.
"Margins were better than expected all across the board," said analyst Eric de Graaf of Petercam Securities.
He praised the company for cutting costs. Net debt was 621 million euros, down by a billion from a year ago and easily manageable.
At Philips' lighting division, sales were down 13 percent to 1.65 billion euros and operating profit dropped by 29 percent to 40 million euros.
The company is expanding its offerings of energy-efficient LED lights as the technology enters the mainstream. Philips also said it was opening chains of Philips-branded lighting stores in China and India.
In health care, the company said it faced reduced demand for imaging and patient monitoring systems. Philips said uncertainty around United States health care reform was hurting orders, which were down 7 percent.
In consumer electronics, sales fell 20 percent to 1.82 billion euros.
However, operating profit more than doubled to 126 million euros as Philips had discontinued unprofitable television lines.
In the same period in 2008, the world's largest lighting manufacturer had reported profits of 57 million euros.
Despite the increase in profit, the company said sales fell 11 percent to 5.62 billion euros in the third quarter of 2009, as demand continued to lag for consumer electronics, high-end health care equipment and many kinds of lights, notably those used in the automobile industry.
Philips added it had not seen "structural recovery in the majority of our end-markets."
The company's Chief Executive Gerard Kleisterlee said: "Most businesses across the company saw further improvement in both comparable sales and underlying earnings compared to the previous quarter."
Analysts said the results beat expectations and shares rose 5.7 percent to 18 euros in Amsterdam.
"Margins were better than expected all across the board," said analyst Eric de Graaf of Petercam Securities.
He praised the company for cutting costs. Net debt was 621 million euros, down by a billion from a year ago and easily manageable.
At Philips' lighting division, sales were down 13 percent to 1.65 billion euros and operating profit dropped by 29 percent to 40 million euros.
The company is expanding its offerings of energy-efficient LED lights as the technology enters the mainstream. Philips also said it was opening chains of Philips-branded lighting stores in China and India.
In health care, the company said it faced reduced demand for imaging and patient monitoring systems. Philips said uncertainty around United States health care reform was hurting orders, which were down 7 percent.
In consumer electronics, sales fell 20 percent to 1.82 billion euros.
However, operating profit more than doubled to 126 million euros as Philips had discontinued unprofitable television lines.
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