Philips swung to a bigger-than-expected third-quarter profit today and reported improving sales at its semiconductor unit.
The Dutch company, Europe's largest consumer electronics group, posted net profit of €124 million ($145 million), helped by contributions from the world's top contract chip maker Taiwan Semiconductor (TSMC) and other companies in which it has stakes.
But at the operating level Philips posted a loss of €126 million because of charges of €152 million, mainly for the closure of two plants at its chip unit.
A Philips spokesman confirmed an earlier forecast that the group would make an operating profit this year.
Philips had been expected to make a third-quarter net profit of some €35.9 million versus a loss of €330 million a year ago, according to a poll of 18 analysts. Charges had been expected to total around €120 million.
Sales came in at nearly €7 billion. They had been expected to fall to €6.5 billion from €7.3 billion. Philips shares opened 0.7 per cent higher at €23.10.
Sales at the chip unit rose to €1.25 billion from €1.19 billion a year ago and were up a surprising 9 per cent in dollar terms from the previous quarter. The head of the divisionhad said third-quarter revenues would grow 5 per cent or more sequentially in dollar terms.