Philips Profit Beats Estimates, Bolstered by Disposals,Savings
Royal Philips Electronics NV, the world’s biggest lightbulb maker, reported profit that beat analysts’ estimates after cutting costs and selling assets.
Earnings before interest, taxes and amortization rose to 552 million euros ($728 million) from 438 million euros a year earlier, the Amsterdam-based company said in a statement. Analysts surveyed by Bloomberg expected 439 million euros. Excluding disposal proceeds, profit fell.
Frans van Houten is now a year into his role of chief executive officer, with the challenge of tackling struggling consumer electronic businesses such as MP3 music headsets remaining.
Philips sold the Senseo coffeebrand to Sara Lee, divested real estate in Eindhoven and appointed new managers for healthcare and lighting units in the first quarter.
“We remain cautious about the remainder of 2012 given the uncertainties in Europe, particularly in the healthcare and construction markets and the slowing growth rate in the global economy,” Van Houten said in the statement today.
Sales rose to 5.6 billion euros from 5.25 billion euros a year earlier. Analysts predicted 5.4 billion euros. Excluding one-time items, profit declined to 425 million euros.
Lighting chief Eric Rondolat has the job of lifting profit as a percentage of sales at the unit to 8 to 10 percent by 2013, after profitability dwindled to 3 percent in the first quarter. Philips has been cutting jobs and shifted production of fluorescent lamps from Roosendaal to Poland to boost competitiveness.
A turnaround at the division would be a crucial catalyst for Philips shares, analysts including Sanford Bernstein’s Martin Prozesky said. The stock has lost 12 percent so far this year.
Net income in the first quarter rose to 248 million euros from 137 million euros a year earlier. Analysts expected net income of 93.2 million euros.