July 23 - Philips Electronics beat forecasts for second-quarter profit, boosted by sales of state-of-the-art hospital equipment and energy-efficient light bulbs, providing more evidence that a drastic overhaul of its business is starting to pay off. Hayley Platt reports.
Once best-known for its televisions, these days Philips Electronics is finding success in healthcare and lighting. A year into a major restructuring programme, including a management reshuffle, the Dutch group beat expectations in the second quarter. Net profit hit 167 million euros. While sales also rose five percent to 5.8 billion euros. CEO Frans Van Houten says the company is on the right track. SOUNDBITE: Frans Van Houten, Philips' Chief Executive, saying (English): "We have confidence that we are on the path to realising our mid-term targets for 2013 it doesn't mean it's a walk in the park we still have a lot to do but let's not forget the strategic positioning of Philips in markets of healthcare, energy efficient lighting in consumer health well-being are very relevant to the emerging economies where people still have some catching up to do in these key areas." Analysts welcomed the numbers, with shares jumping almost 7 percent in early trade. But the road ahead for Europe's largest consumer producer is murky. The company is worried about fragile consumer spending, particularly in Europe, which accounts for around 25% of revenue growth. But James Hughes from Alpari says there is light at the end of the tunnel. SOUNDBITE: James Hughes, senior Markets Analyst, Alpari, saying (English): "Although it's going to be a challenging rest of the year I think from a consumer point of view and the consumer side of this business it is a little bit better than what was expected so when we were expecting absolutely nothing to come out of this arm to get something is going to be an area where Philips are still looking at this growth." Philips is confident that its 800 million euro restructuring scheme, which includes more than 4000 job cuts, is paying off. It also expects further growth coming from innovation in Russia, China and the U.S. But the company won't rule out further changes this year, in its attempt to boost margins. Hayley Platt, Reuters.