Philips Swings to a Profit
Philips Electronics NV swung to a fourth-quarter
profit on improved operational earnings and lower charges, and said Monday it
hopes to further improve profitability this year.
The company said net profit for the quarter ended Dec.
31 was €260 million ($367.6 million) compared with a net loss of €1.17 billion
a year earlier, beating analysts' forecast for net profit of €255 million. Fourth-quarter
sales were €7.3 billion, slightly down from €7.6 billion a year earlier
"Comparable sales came in at last year's levels,
delivering a record profitability, adjusted for restructuring and acquisitions
related charges, of 12.3%," said Chief Executive Officer Gerard
Kleisterlee.
As the economic recovery is still uncertain, Mr.
Kleisterlee said Philips won't resume its share buyback program in 2010,
preferring instead "to have financial flexibility to do
acquisitions."
Philips halted its €5 billion share buyback program in
early 2009 due to the economic decline, which hurt demand for the company's
products such as television sets, shavers, lighting and medical equipment.
Restructuring and acquisition related charges fell by
€191 million to €230 million in the fourth quarter, while financial expenses
mostly related to impairment charges came in at €78 million from €705 million a
year before.
Earnings before interest, taxes and
amortization–analysts' preferred measure of operating performance– came in at
€662 million compared with €26 million a year earlier and improved across
divisions. The company said it now hopes to make progress this year towards its
target for an Ebita margin of 10% or better.
Philips' earnings were much better than expected, said
SNS Securities in a note, adding that health care performed particularly well
against a strong fourth quarter in 2008, while the performance in its lighting
division was also good given challenging end markets due to the construction
downturn.
Source: wsj.com