Philips profits soar but TV sales weak
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Philips saw profits soar 79% in the last three months of 2010 but warned that poor television sales are a “major issue”.
Philips reported a net profit of €465m (£395m), up from €260m (£219m) in the same period a year earlier, largely driven by the expansion of its healthcare business.
Comparable sales, however, declined by 4% in the fourth quarter due to “a weak television market, negative consumer sentiment in developed markets and inventory management in the trade which resulted in a particularly slow December”, according to its chief executive Gerard Kleisterlee.
Philips also warned that consumers in mature markets will be reluctant to spend in 2011.
The value of its sales for the quarter rose by 2% to €7.39bn (£6.22m) but mostly helped by positive currency movements, otherwise sales would have fallen.
Strong results in North America and emerging markets offset the “weak consumer demand” in Western Europe where sales fell 10%.
Drivers for growth in 2011 will come from emerging markets, which currently account for around a third of sales, Philips says.
