Philips Q3 opg beats forecasts; to boost cash returns to shareholders UPDATE

Philips Q3 opg beats forecasts; to boost cash returns to shareholders UPDATE

	Published : Mon, 15 Oct 2007 07:33 By : Agencies Print this Story

(updates with divisional breakdown)

AMSTERDAM (Thomson Financial) - Royal Philips Electronics NV reported sales and operating profit (EBIT) ahead of market forecasts in the third quarter, driven by strength in its lighting and consumer business.

The Dutch electronics giant also said it will announce further steps in its programme to return cash to shareholders when it publishes its fourth quarter results.

Third quarter sales were 6.524 bln eur, up from 6.313 bln and higher than market expectations of 6.316 bln.

EBIT was 385 mln eur from 25 mln, and well above the 343-349 mln eur expected. EBITA was 438 mln eur, up from 71 mln.

But net profit came in below forecasts at 331 mln eur, up from an adjusted 1 mln eur and missing an analyst consensus of 362-392 mln eur. The bottom-line

figure included 91 mln eur in charges related to a reduction in the value of carried-forward tax losses.

Looking ahead, Philips said it sees 'potentially weaker' US markets, but said that it expects other markets, and especially the emerging ones, to compensate.

It also said it will continue to pursue 'value-creating acquisitions consistent with our strategic direction'.

By division, sales at Medical Systems were 1.6 bln eur, up from 1.575 bln, with a sales growth of 3 pct, half of the 6 pct reported last year. EBITA dropped to 182 mln ur, from 192 mln, primarily the result of lower sales in the US.

Sales at Domestic Appliances and Personal Care (DAP) were 718 mln eur, up from 577 mln, while sales increased by 20 pct, from 9 pct a year earlier, and EBITA was 135 mln eur, up ffrom 96 mln.

Consumer Electronics saw sales rise to 2.520 bln eur, up from 2.407 bln, while sales growth was 8 pct, versus a contraction of 1 pct a year earlier. EBITA increased to 36 mln eur, up from 27 mln. Margin pressure on flat screen televisions was offset by higher EBITA in other units.

Sales were 1.496 bln eur at Lighting, up from 1.370 bln, but sales growth dropped to 2 pct, down from 10 pct a year earlier. Philips contributed the lower growth rate to divestments. EBITA was 190 mln eur, up from 134 mln.

By Kaj Leers, kaj.leers@thomson.com

kel/jms/jms

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