Philips sees profits light up but it warns on sales growth
Most of the profit gains were owing to a lowering of operating costs.
Net profit for the three months ended September 30 rose to 282 million euros from 105 million euros a year earlier. Sales were down 3% to 5.62 billion euros, mainly due to the negative impact from a stronger dollar.
"This was another solid quarter for Philips, especially in light of the challenging global economic environment," said Chief Executive Frans van Houten, noting the improvement of operational results showed the benefits of the company’s restructuring program.
Philips warned sales growth is not expected to improve in the quarters ahead. "Ongoing headwinds in the global economy are expected to continue to affect sales growth in the coming quarters," van Houten said.
Under the leadership of van Houten, the Amsterdam technology company has focused on a narrower range of businesses and cut costs to improve profitability. The company generates almost 80% of sales from its lighting and health-care businesses, which sell products such as hospital scanners and light-emitting-diode, or LED, lighting and control systems.
In the third quarter, Philips’s operating margin reached 10%, up from 6.3% a year ago. Philips said that margins for full-year 2013 would come in at the low end of its 10% to 12% range.
Since van Houten took over in April 2011, Philips has sold the company’s money-losing television business and earlier in 2013 struck a deal to transfer its lower-margin audio, video and multimedia business to Japan’s Funai Electric Co.
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