Philips net profit leaps

16th July 2007, Comments 0 comments

16 July 2007, AMSTERDAM (AP) - Royal Philips Electronics NV, a maker of medical and lighting equipment, said Monday net profit for the second quarter rose due to a large gain on the sale of a stake in Taiwan Semiconductor Manufacturing Company Ltd.

16 July 2007

AMSTERDAM (AP) - Royal Philips Electronics NV, a maker of medical and lighting equipment, said Monday net profit for the second quarter rose due to a large gain on the sale of a stake in Taiwan Semiconductor Manufacturing Company Ltd.

Net profit was EUR 1.57 billion, up from EUR 301 million a year earlier, while sales fell 4.4 percent to EUR 6.10 billion from EUR 6.38 billion.

The company blamed the fall in sales on unfavourable exchange rates and said they would otherwise have been "on par" with a year earlier.

Most notable was an 11 percent fall in sales at the company's consumer electronics division to EUR 2.15 billion.

Still, Chief Financial Officer Pierre-Jean Sivignon forecast a rise in consumer electronics sales in the second half of the year, due to the introduction of new products, including a new range of flat panel televisions.

Excluding the EUR 1.22 billion gain on the sale of a 4.7 percent stake in TSMC, operating profit gained 22 percent, mostly as a consequence of lower overheads.

Consumer electronics remains Philips' best-known and largest division by sales but with an operating profit of 1 percent, or EUR 21 million in the second quarter, it is dwarfed in importance by the more profitable medical and lighting businesses. These businesses posted second-quarter operating profit of EUR 151 million and EUR 150 million, respectively.

"Philips continued to measure growth where it matters most: in our high-margin divisions," Sivignon said.

However, the medical division's growth continues to suffer from cutbacks to spending in U.S. Medicare and Medicaid programs, Philips said.

Philips' household appliances division, best known for making electric shavers, is also more profitable than the consumer electronics business, with a second quarter operating profit of EUR 80 million, up from EUR 58 million a year ago. That was the best operational growth in the company. Philips attributed it to strong sales of kitchen appliances, especially in developing countries.

[Copyright AP 2007]

Subject: Dutch news

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