Royal Philips Electronics NV yesterday reported net profit of 174 million euros (US$256 million) for the third quarter, three times the depressed levels of a year ago, crediting cost-cutting measures.
In the same period last year, the world’s biggest lighting manufacturer had reported profits of 57 million euros, including around 80 million euros in net restructuring and impairment charges.
Despite the increase in profit, the company said sales fell 11 percent to 5.62 billion euros in the third quarter this year, as demand continued to lag for consumer electronics, high-end health care equipment and many kinds of lights, notably those used in the automobile industry.
Philips said it had not seen “structural recovery in the majority of our end-markets.”
In a statement, the company’s chief executive said “underlying” margins — a nonstandard term — were “among the highest in recent years” at 6.8 percent of sales.
“Most businesses across the company saw further improvement in both comparable sales and underlying earnings compared to the previous quarter,” Gerard Kleisterlee said.
At Philips’ lighting division, sales were down 13 percent to 1.65 billion euros and operating profit dropped by 29 percent to 40 million euros. The company is expanding its offerings of energy-efficient LED lights as the technology enters the mainstream.
Philips also said it was opening chains of Philips-branded lighting stores in China and India.
In health care, where Philips competes with General Electric and Siemens, the company said it faced reduced demand for imaging and patient monitoring systems. Stripping out the impact of acquisitions, sales fell 4 percent and operating profit fell 15 percent to 110 million euros.
Philips said that uncertainty about US health care reform was hurting orders, which were down 7 percent.
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