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October 23, 1997updated 03 Sep 2016 11:39am

PHILIPS EARNINGS LEAP PLEASES ANALYSTS

By CBR Staff Writer

The ongoing restructuring at Philips Electronics NV has resulted in further huge benefits to the group’s earnings figures in the third quarter, adding weight to finance director Jan Hommen’s claims that the turnaround is a long term trend. The results that we’re picking up from restructuring in principle are fundamental pickups and should be sustainable, he told reporters at a news conference on Thursday. Net profits in the three months to September 30 rose to $358m from $61m last year before one off gains from the divestiture of certain business units resulting in gains of $353m. Earnings were at the upper end of analyst’s estimates and revenues rose 18% to $9.39bn in the quarter. The company said its operating income from the Components and semiconductors division grew 45% to $856m in the first nine months on revenues up 20% at $6.98bn including intersegment sales. Semiconductor margins improved while also taking a lift from currency effects, and semiconductor sales were gaining in momentum over the second quarter the company said. This is the group’s second biggest division behind Consumer products, which shrank in revenue terms by 2% in the same period to $8.36bn. Consumer products sold off its interest in the loss making Grundig AG this year. European operating profits saw a big jump, especially in the Netherlands and Germany while the fastest growth came from Eastern Europe. While the results were excellent, the shares fell 5% along with the rest of the Dutch market as Amsterdam felt the repercussions of the disastrous 10% fall in Hong Kong’s Hang Seng index.

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