Philips reported a profit in the second quarter, defying analysts’ expectations of a loss.
Net profit was €44 million, or 5 cents a share, compared with €732 million, or 72 cents, a year earlier, the Amsterdam-based company said in a statement. Analysts had predicted a loss of €122.5 million.
Profit at Philips, among the first of the major electronics companies to report second-quarter results, may be an indicator of how the industry fared amid the global economic slump.
Philips Chief Executive Officer Gerard Kleisterlee, who is cutting 6,000 jobs, raised his cost-saving estimate to more than €600 million, up from €500 million.
The company said today it expects its performance in the remainder of the year to be better than in the first six months.
“The fact that they’re giving an outlook is positive given the uncertainty in the market,” said Victor Bareno, an Amsterdam-based analyst at SNS Securities.
The earnings were released before the start of trading at Euronext Amsterdam. Philips shares have lost 6.4 per cent this year, compared with a drop of 1.1 per cent for Amsterdam’s benchmark AEX Index.
Earnings before interest, taxes and amortization slipped to €118 million from €396 million in the year-earlier period. Sales fell 19 per cent to €5.23 billion, missing the median estimate of €5.32 billion.
Comparable sales at the health- care division fell 5 per cent to €1.87 billion.
Revenue at the consumer lifestyle unit declined 36 per cent to €1.74 billion from a year earlier, while the lighting division’s sales slid 14 per cent to €1.55 billion.
In the June issue of its internal publication Philips Magazine, the CEO said sales would probably not pick up in the second quarter and that the company
may have to take additional measures in the coming months.
Bloomberg