Philips profit beats forecast as revamp gathers pace

Mon Oct 22, 2012 4:58am EDT
 
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By Roberta Cowan

AMSTERDAM (Reuters) - Philips Electronics (PHG.AS: Quote) beat earnings forecasts for the third consecutive quarter, boosted by cost cuts and higher sales, as a drastic overhaul of the company gathered pace.

The Dutch group known for its hospital scanners, electric toothbrushes, wake-up lights and coffee makers, on Monday said third-quarter net profit more than doubled helped by higher sales across its health, lighting and consumer divisions.

Since taking the helm last year, chief executive Frans van Houten has reset financial targets, cut thousands of jobs and replaced his entire top executive team in an effort to turn around the company which lost 1.3 billion euros ($1.7 billion) in 2011.

Philips said on Monday that plans to cut 1.1 billion euros in overheads are on track with savings in the third quarter of 306 million euros.

The company first started to show signs of a pick-up in the first half of this year.

Its shares were trading up 4.6 percent by mid morning on Monday, the biggest gainer on the FTSEurofirst 300 .FTEU3 index of top European shares.

Van Houten said he was still cautious about the firm's growth prospects.

"The world has become a lot riskier with three headwinds simultaneously, (namely) Europe, slowing growth in China and some uncertainty in the U.S.," Van Houten told reporters on Monday.   Continued...

 
The logo of Philips is seen at the company's entrance in Brussels September 11, 2012. REUTERS/Francois Lenoir