|
By: Richard Del Cazzo
Web site: http://www.hdtv-hdtv.com
Koninklijke Philips Electronics NV reported
Tuesday strong first-quarter earnings driven largely by higher
sales of products in its semiconductor and consumer-electronics
divisions.
The Amsterdam-based electronics conglomerate posted a first-quarter
net profit of €550 million (US$669.8 million as of March
31, the last day of the period being reported), compared to
a net loss of €69 million in the same period the year
before, the company said in a statement.
Sales in the first quarter rose 2 percent to €6.63 billion
from €6.5 billion compared to the same period a year
earlier.
"We have been able to maintain the positive momentum
begun in 2003," said Chief Financial Officer Jan Hommen
in a telephone news conference.
Philips posted a net profit of €695 million in 2003
after two consecutive years of multibillion losses.
The Dutch company expects to post a profit in 2004, with
sales rising between 5 percent to 10 percent, according to
Hommen. "I would say 10 percent is at the very high end;
5 to 7 percent is more likely," he said, adding that
supporting events, including the Olympic games in Greece and
the European soccer championship in Portugal, would help spur
demand for consumer-electronic products.
Income from operations, or earnings before interest and tax,
rose to €218 million from €32 million the year before.
All of the company's five divisions -- lighting, medical systems,
semiconductors, domestic appliances and consumer electronics
-- posted operating profits for the second straight quarter.
Strong demand for flat screens used in televisions and computer
monitors have helped fuel Philips earnings recovery, Hommen
said. The LG. Philips LCD Co. venture with South Korea's LG
Electronics Inc., a leading supplier of liquid crystal displays,
contributed €215 million to Philip's first-quarter net
income.
"We see the LCD business continuing to grow strong,"
Hommen said.
The consumer-electronics division saw first-quarter sales
grow to €2.01 billion from €1.94 billion the year
before, with a dip in operating profit to €59 million
from €73 million. In the key U.S. market, the division
"did significantly better than a year ago," Hommen
said without providing figures, adding that the unit "could
break even or even post a small profit in 2004."
First-quarter semiconductor sales rose to €1.30 billion
from €1.13 billion a year earlier. Income from operations
was €75 million, compared to a loss of €178 million
a year earlier. The company is experiencing exceptionally
strong demand for chips used in mobile phones and flat-screen
TV sets and computer monitors, according to Hommen.
Net debt at Philips stood at €3 billion at the end of
March, compared to 5.6 billion in the same period a year earlier.
After two years of intensive restructuring, the company now
stands on a sturdy footing "with a very strong balance
sheet," Hommen said. It has been reducing staffing over
the past few years in a move to minimize exposure to economic
cycles and lift its operations back to profitability.
Philips employed 165,312 people at the end of March compared
to 164,438 at the end of last year and 166,394 at the end
of March 2003.
The company will book a second-quarter net gain (after costs
and taxes) of about €100 million after U.S. software
vendor Microsoft Corp. agreed on Monday to pay InterTrust
Technologies Corp. $440 million to end a patent dispute. Philips
owns 49.5 percent of InterTrust.
|
