Philips Electronics NV, the Dutch electronics giant, has reported net profits for the year to December 31 at the equivalent of $6.85bn up from $2.94bn on revenues that rose 2.6%% to $34.46bn. Earnings per share rose 128.4% to $18.87. However, if you strip out the $5.4bn gain from its sale of its 75% interest in PolyGram and you have an organization whose profits from continuing operations plunged 56% on revenues that lumbered forward by 2.6% to $34.4bn. Philips is sticking by its objectives of double-digit earnings growth, positive cash flow and a return on net assets of 24%. Prospects for the next two quarters are not favorable though Philips hopes that the second half will show an improvement on the same period last year. Philips Consumer Communications (PCC) plunged the consumer products division into the red to the tune of $315m after running up staggering $940m losses on its 60/40 association with Lucent in fixed and mobile equipment, which was dissolved in September 1998. Philips is still pressing ahead with the project, claiming that as telecommunications, computer and multimedia technology converge, it needs to retain world class expertise in the mobile field. The other big profits drainer is its liquid crystal display joint venture with Japanese company Hosiden which burned $114m but Philips is optimistic that profits will now improve as there is no longer over-capacity in the sector. Elsewhere, Philips has suffered as price erosion has hit a wide range of products, and the company plans to close up to one-third of its worldwide manufacturing plants by 2002. Philips shares eased 2.5% to 61.30 euros on the figures.