by CIO Staff

Philips Q3 Profit Soars on Sale of Semiconductor Unit

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Oct 16, 20062 mins
Data Center

Third-quarter earnings nearly tripled at Koninklijke Philips Electronics, boosted by the sale of its chip business, but revenue remained flat. The Dutch manufacturer is refocusing on less volatile areas such as medical systems, lighting and consumer electronics products, after last week completing the sale of its mobile phone business.

Net income in the third quarter soared to 4.2 billion euros (US$5.4 billion as of Sept. 30, the last day in the period being reported) from 1.4 billion euros in the same period a year earlier.

The surge in profit stemmed largely from the sale of 80.1 percent of its semiconductor business, worth approximately 4.2 billion euros.

Revenue for the third quarter rose 1 percent, to 6.31 billion euros, from 6.26 billion a year earlier.

Sales in the consumer electronics division dropped 5 percent to 2.41 billion euros.

Last week, Philips announced its decision to quit the mobile phone manufacturing business and sell its remaining activities to China Electronics.

“The mobile phone business was a very marginal business for us,” said Pierre-Jean Sivignon, executive vice president and chief financial officer, in a conference call with analysts. “It wasn’t efficient for us to continue.”

Revenue increased in the medical and lighting divisions—the group’s most profitable arms. Medical sales rose 3 percent to 1.6 billion euros, with lighting up 16 percent to 1.4 billion euros.

Philips views health-care gadgets, targeted largely at an aging baby-boom generation, as a market with great potential, Rudy Provoost, chief executive officer of Philips’ consumer electronics division, said at the IFA electronics show in Berlin last month.

As part of its Connect Care product development project, Philips is working on a variety of “body-driven” consumer electronics products that could help improve people’s health and well-being.

-John Blau, IDG News Service (Dusseldorf Bureau)

Related Links:

  • Philips Completes Sale of Chip Unit Stake

  • Toshiba, LG.Philips Team on LCD Panels

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