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Philips Electronics first-quarter net income surges

Health-care and lighting sales grew, while consumer lifestyle sales declined.

The Dutch group Philips Electronics has reported a net income of €249m for the first quarter of 2012, compared to €138m for the same period last year.

Earnings before interest, taxes, depreciation and amortisation were €552m (2011: €438m), while sales were €5.61bn (2011: €5.26bn).

General and administrative expenses were €188m (2011: €209m); research-and-development expenses were €443m (2011: €390m).

Frans van Houten, CEO of Royal Philips Electronics, said:

I am encouraged by our results in the first quarter of 2012, which is a further step in the right direction for Philips on our path to value to achieve the mid-term 2013 financial targets.

For the quarter, the company’s health-care, consumer-lifestyle, lighting and innovation, group and services divisions reported sales of €2.21bn, €1.29bn, €2.02bn, and €98m, respectively.

Compared to Q1 2011, health-care sales grew 9 per cent and lighting sales grew 2 per cent, while consumer-lifestyle sales declined by 1 per cent.

Houten added:

Health-care sales and order intake showed robust growth and the growth businesses of consumer lifestyle continued to perform well. After a declining trend over the past seven quarters, I am quite pleased with the sequential performance improvement at lighting, as organisational changes and operational improvements began to show positive results.

We remain cautious about the remainder of 2012, given the uncertainties in Europe, particularly in the health-care and construction markets, and the slowing growth rate in the global economy . . . We expect our results in 2012 to be impacted by restructuring charges and one-time investments aimed at improving our business performance trajectory, as part of the multi-year Accelerate! programme. Notwithstanding these one-time charges, we expect the underlying operating margins and capital efficiency in the sectors to improve in the latter part of 2012.