Philips says Q3 income slipped to 331m euros

Royal Philips Electronics NV, the world's biggest maker of light bulbs and electric shavers, said third-quarter profit plunged after it had a one-time gain from the sale of its semiconductor unit a year earlier.

Net income fell to 331 million euros, or 31 cents a share, from 4.24 billion euros, or 3.59 euros, a year earlier, Philips said in a statement yesterday.

Philips had a 4.19 billion-euro gain from the sale of a majority stake in its chip division last year. Sales rose 3.3 percent to 6.52 billion euros.

Philips, led by Chief Executive Officer Gerard Kleisterlee, has sold most of its semiconductor assets to focus on appliances, medical scanners and lighting.

The Amsterdam-based company sold a stake in its LG.Philips LCD Co venture, the world's second-largest maker of liquid crystal displays, for 1.55 billion euros last week to raise cash for buybacks, dividends and acquisitions in the units it plans to bolster.

"It's particularly encour-aging to see impressive growth in areas that have become, and will continue to be, increasingly important for our company, such as the key emerging markets of Latin America, China and India," the CEO said in the statement.

"Philips is well positioned to meet the objectives outlined in our recently communicated 'Vision 2010' strategic plan."

The report was released before the start of trading. Philips shares have gained 13 percent this year, in line with the benchmark Amsterdam Exchanges Index.

Continuing operations

Income from continuing operations, which excludes gains and losses from disposals, rose to 333 million euros in the third quarter from 1 million euros a year earlier.

Earnings before interest, tax and amortization rose to 438 million euros from 71 million euros.

The year-earlier number included a 265 million-euro one-time cost to reflect a change in accounting for asbestos-related product liabilities.

On September 10, Philips raised its profit forecast because of lower costs linked to the planned merger of its healthcare units and of the consumer divisions.

Earnings before interest, tax and amortization will top 10 percent of sales by 2010, up from more than 7.5 percent this year, and operating earnings per share will more than double, the company said at the time.

Bloomberg News

(China Daily 10/16/2007 page16)