Dutch consumer electronics giant Royal Philips Electronics (PHG,PHGFF.PK) on Monday reiterated its cautious outlook for 2012, even as first-quarter profit increased significantly from last year. The company said cost savings from its Accelerate! improvement program are on track.
CEO Frans van Houten said, "We remain cautious about the remainder of 2012 given the uncertainties in Europe, particularly in the healthcare and construction markets, and the slowing growth rate in the global economy."
The company continues to expect results in 2012 to be impacted by restructuring charges and one-time investments, as part of the multi-year Accelerate! program. "Notwithstanding these one-time charges, we expect the underlying operating margins and capital efficiency in the sectors to improve in the latter part of 2012," Houten added.
Net income attributable to shareholders for the first quarter increased to 248 million euros from last year's 137 million euros. Earnings per share increased to 0.27 euros from 0.14 euros.
The latest results included the Senseo transaction with Sara Lee, a gain from sale of real estate and a lower loss from discontinued operations.
In the preceding quarter, Philips had reported a loss after including the results of the television business to be carved out as a loss of 272 million euros from discontinued operations.
Sales in the first quarter climbed to 5.61 billion euros from 5.26 billion euros last year. Comparable sales grew 4 percent, led by 9 percent growth at its Healthcare segment. Sales in growth geographies increased 9 percent on a comparable basis.
Patient Care & Clinical Informatics as well as Imaging Systems segments saw double-digit growth. Consumer Services and Home Healthcare Solutions witnessed mid-single digit growth.
Consumer Lifestyle sales improved 3 percent to 1.29 billion euros amid strong growth at Personal Care, Health & Wellness, and Domestic Appliances. As a result of the joint venture with TPV, television results are not part of the Consumer Lifestyle segment.
In Lighting division, sales were 2.02 billion euros, up 6 percent from last year. LED-based sales climbed 22 percent. The segment's results were impacted by operational issues at Consumer Luminaires and Lumileds, as well as a one-time loss on the sale of assets.
Geographically, sales increased 4 percent in mature geographies with a 6 percent growth in North America and a 19 percent increase in Other mature geographies. Growth geographies recorded a 12 percent improvement in sales for the quarter.
Philips said its overhead cost reduction program is on track and that incremental savings in the first quarter totaled 37 million euros. Cumulative savings to the end of 2012 are expected to be 400 million euros.
The stock closed in Amsterdam on Friday higher by 1.81 percent at 14.34 euros on a volume of 5.93 million shares.
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