Consumer electronics giant Philips Electronics this morning reported a return to profitability with a €550m net profit, well ahead of market expectations.
The Dutch electronics manufacturer’s first quarter turnover increased by 2pc to €6.63bn, as strong sales growth for chips and consumer electronics helped return the group to a profit.
In the three months, operating profit improved to €218m from €32m in the same quarter a year earlier.
Net profits were €550m, compared to a year-earlier loss of €69m, with a contribution of €457m in profit from associated companies. This was mainly due to stronger than forecast income from non-consolidated companies like the world’s largest flat panel display maker LG.Philips LCD, which is benefiting from booming demand for thin TVs and monitors.
Philips said it expects restructuring charges of €35m for consumer electronics in the second quarter.
The group said it expects to see €400m in cost savings at the division by the end of 2005.
“Our results and our order books indicate that the company is on a more stable footing now, and we should see this trend continue through the rest of 2004,” Philips’ chief executive Gerard Kleisterlee said in a statement.
By John Kennedy
