Philips says lifestyle goods boost profits six-fold

19th July 2010, Comments 0 comments

Products for lifestyle and lighting, and emerging markets, helped electrical equipment and electronics giant Philips to boost quarterly net profit six-fold, it said on Monday.

Net profit for the second quarter rose to 262 million euros (340 million dollars).

This was a rise from 45 million euros in the same period last year and from 201 million euros in the first quarter of this year.

Philips said its profit was based on a 12-percent rise in sales on a 12-month comparison to 6.19 billion dollars.

"Philips delivered another strong quarter, with good top-line growth and strong profitability in all three operating sectors," Philips president Gerard Kleisterlee said in a statement.

"Sales performance was especially strong in emerging markets."

Emerging markets sales growth accelerated to 29 percent, now representing over one-third or 34 percent of total sales, said the company's quarterly report.

Sales of consumer lifestyle electronics, like television sets, electric shavers or rechargeable toothbrushes, rose by 20 percent compared to the second quarter of 2009.

Sales in lighting for the home, car, street and business grew by 13 percent, while sales of healthcare product like defibrillators, X-ray machines and CT scanners, grew four percent.

Philips said its earnings before interest and tax (EBIT) grew 50-fold to 404 million euros from eight million euros in the second quarter of 2009.

"It is encouraging to see that our performance continues to improve despite ongoing weakness in many global markets and economic uncertainty," said Kleisterlee.

For the rest of the year, Philips expected sales to moderate, the statement said, partly due to the "continued but slow recovery in the US and Europe".

TV sales were expected to mellow after the football World Cup played in South Africa in June and July.

"We will continue to drive further improvements, including, where necessary, taking the required actions to offset the effects of rising commodity and component prices," said the report.

Philips said it would launch a series of new products soon, including its "most advanced premium electric shaver to date", and coffee appliances and blu-ray (optical disk) players "that deliver simplicity to consumers".

For the first six months of the year, the company said its net profit rose to 463 million euros from a loss of 12 million euros in the same period the year before.

Philips employs more than 116,000 people in more than 60 countries.

The company's share price had lost about three percent by lunchtime to reach 24.17 euros.

© 2010 AFP

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