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Philips Earnings Jump on Emerging Market Sales

More than one-third of the company sales come from these markets

Electronics giant Philips reported on Oct. 18 a three-fold rise in third-quarter net income to 524 million euros (US$728 million), due partly to rising emerging market sales.

"We ... continued on our growth path in emerging markets, with 19% nominal and 7% comparable sales growth," Philips president Gerard Kleisterlee. "This means that we now generate more than one-third of our sales in these markets."

Philips said earnings before interest, tax and amortization (Ebita), amounted to 648 million euros or 10.5 % of sales -- 304 million euros higher than a year ago.

The income statement was boosted by 154 million euros from the sale of Philips' remaining stake in semi-conductor manufacturer NXP to the Philips UK pension fund.

Philips said comparable sales for mature markets, "in a still fragile economic environment", declined by 1%.

Overall sales grew from 5.6 billion euros a year ago to 6.2 billion euros, with a 4% increase in comparable sales figures for healthcare products and seven percent in lighting, the company said.

For consumer lifestyle products, comparable sales were 5% lower than a year ago, with comparable sales of televisions 12% down.

"Given the uncertain economic climate and fragile consumer confidence in some of our markets, we take a cautious view on revenue development in Q4 2010," Philips said. "We will continue to drive growth initiatives and operational improvements to further exceed the targeted Ebita, adjusted for restructuring and acquisition-related charges, of 10% for the full year 2010."

For the first nine months of the year, the figure was 10.1% -- up from 6.1% in 2009.

Philips employs more than 118,000 people in more than 60 countries.

Copyright Agence France-Presse, 2010

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