Philips Electronics is finally getting its act together in the consumer electronic market after years of losses.
Philips Electronics is finally getting its act together in the consumer electronic market after years of losses. In the last quarter the company reported an 8 percent gain for the period. CE segment sales climbed to $3.07 billion, up from $2.75 billion in the same three months in 2004. Connected displays and home entertainment networks posted strong sales growth in the third quarter, leading the consumer electronics segment.
Income from operations for the Dutch company’s CE segment reached $198.1 million for the quarter, ended Sept, 30, compared with a loss of $14.5 million in the third quarter last year. Income from operations in the third quarter included a gain of $164.3 million due to the completion of the TPV deal. Excluding the gain and an $80.9 million reduction in license income, the CE segment’s income, excluding restructuring, showed a marked improvement, said Philips.
Adjusted for restructuring and the $164.3 million gain, CE segment income from operations, excluding licenses, grew to $14.5 million in the third quarter. Total restructuring charges amounted to $26.6 million, compared with $32.6 million in the same three months a year earlier. CE restructuring charges of $24.2 million are expected in the fourth quarter.
CE sector capital expenditures in the third quarter hit $23 million, down from the $24.2 million spend in the same three months a year earlier.
Philips reported sales growth in all regions, citing mainly North and Latin America. North American sales in the third quarter jumped 8 percent, hitting $2.5 billion, up from a year-on-year $2.3 billion. North American sales in the third quarter accounted for 28 percent of Philips’ volume.
Consolidated Philips sales rose 5 percent in the fourth quarter, coming in at $9.2 billion, up from a year-ago $8.7 billion. “We were able to outperform weaker consumer markets thanks to innovative concepts like the new flat TV,” said Gerard Kleisterlee, president/CEO. Consolidated net income reached $1.7 billion in the third quarter, up from $1.4 billion the previous year. The increase was primarily attributable to the sale of several businesses, which together yielded a non-taxable gain of $1.3 billion. In the third quarter of 2004, Philips included a $767.2 million non-taxable gain related to the Navteq IPO. For the nine months, consolidated Philips sales increased to $25.8 billion from a year-ago $25.5 billion, while net income rose to $3.1 billion, from $2.8 billion in the same period the prior year.
