Stimulus packages spur Philips recovery hopes

By Harro ten Wolde

AMSTERDAM (Reuters) - Philips Electronics, Europe's biggest consumer electronics maker, said some of its key markets are primed for an upturn in sales, though any growth this year would likely be driven by government spending programs.

The Dutch conglomerate -- the world's biggest lighting manufacturer -- surprised industry experts on Monday with a return to profit in the second quarter, helped by cost cuts.

Its shares were up 5.2 percent at 13.62 euros by 1249 GMT (8:49 a.m. EDT), the top gainers in the DJ Stoxx 50 index, which was up 1.1 percent. The stock rose as high as 13.73 euros, its highest in a month.

Philips said it expected a better second half and said some of its markets, notably in emerging economies, might be bottoming out -- though with global economic data sending mixed signals, Chief Financial Officer Pierre-Jean Sivignon cautioned against hopes of an early consumer-led end to the slump.

"If I had to guess I would say (growth) would come from the countries with stimulus packages. Because we know those plans are for real," Sivignon told Reuters.

Quarterly earnings before interest, taxes and amortization (EBITA) reached 118 million euros ($164.4 million), easily beating an average forecast of a 79 million euro loss from a Reuters poll of 23 analysts, as the healthcare division shone.

First signs of recovery, which would mainly benefit its healthcare and lighting units, could come from China and Germany, with the United States and France following next year, Sivignon said.