Philips earnings rise but cautious on outlook
AMSTERDAM, Netherlands – ROYAL Philips NV, the world’s biggest lighting maker, said it sees a brighter future in selling lighting “as a service” to businesses rather than individual lamps to customers, as it reported a rise in fourth quarter earnings yesterday.
Despite an upbeat review of the company’s performance, CEO Frans van Houten said he is “cautious” heading into the new year, given a “softer order intake” in the fourth quarter amid uncertainty in emerging economies.
Shares fell 2.1 per cent to 25.91 (euro) by midday trading in Amsterdam.
Philips reported a net profit of (euro) 409 million (US$559 million), compared with a loss of (euro) 423 million in the same period a year earlier, when it was fined (euro) 509 million by the European Union Commission for price-fixing in the TV market.
Fourth quarter sales rose 0.6 per cent to (euro) 6.80 billion. Comparing like-for-like businesses and stripping out the impact of currency shifts, sales rose seven per cent.
Van Houten said the company continues to shift its business model to focus on professional lighting and health care markets where it enters longer-term partnerships with governments and hospitals. He said these have both more stable service revenues and higher margins.
In lighting, where sales were up eight per cent on a like-for-like basis, he said growth was coming from major contracts such as building retrofits.