Philips says TV sales help to boost profit

GLOBAL electronics firm Philips yesterday reported a net profit of €251m (£220m) for the last three months of 2009.

The profit reverses a loss of €1.2bn in the same period a year ago as the recession took its toll on the Dutch firm. The company said its profits were higher at all divisions, despite sales declines for some goods.

Television sales were particularly strong with lighting also boosted by an increased demand in the automotive industry.

However, fourth-quarter sales fell 3.4 per cent to €7.3bn – as the US healthcare market continued to struggle. Philips said job cuts had helped it to achieve the profit boost, which exceeded analysts’ predictions.

It has shed 5,474 jobs in the past year as part of a cost-cutting drive.

Shares jumped five per cent after the upbeat figures were announced.

Philips chief executive Gerard Kleisterlee said: “Comparable sales came in at last year’s level, delivering a record adjusted profitability of 12.3 per cent.”

He added: “This reflects the successful manner in which we have been managing through the downturn.”

But Philips said it was seeing continued weakness in the US healthcare market, where clients still have difficulties financing bankrolling specialist equipment such as brain scanners.

But sales are being tipped to rise again when uncertainty over the US healthcare legislation ends.

German competitor and industrial conglomerate Siemens said earlier this month trading conditions were still tough, while downward pressure on selling would impact revenues.

Kleisterlee said Philips could not yet offer a “reliable” mid-term prediction for future profits because of uncertainty in the market.