(Corrects two units reported higher EBITA, not three, in para
16; removes extraneous word in para 14)
* Q2 net profit 167 mln euros vs 118 mln forecast
* Q2 revenue up 5 pct yoy, Healthcare sales up 7 pct
* Considering options for Audio/Video unit
* Shares up more than 7 pct, hit highest in almost a year
* Keeps 2013 outlook
By Roberta Cowan
AMSTERDAM, July 23 Philips Electronics
beat forecasts for second-quarter profit, boosted by sales of
state-of-the-art hospital equipment and energy-efficient light
bulbs, providing more evidence that a drastic overhaul of its
business is starting to pay off.
Europe's largest consumer electronics producer, the world's
biggest lighting maker, and a top-three maker of hospital
equipment said on Monday it would consider options for its
low-margin audio and video equipment business - one of the last
units to get shaken up.
Philips was hammered last year by rising raw material costs,
sagging consumer confidence, sluggish construction markets and
government budget cuts that hit both its healthcare and lighting
In his first year at the top, Chief Executive Frans van
Houten issued two profit warnings, reset financial targets, cut
thousands of jobs, replaced his entire top executive team and
eventually hived off the loss-making TV business.
On Monday he said he was confident Philips will make its
2013 financial targets.
"The general economy is not our friend, but we have seen
some growth in Russia, the Middle East, Asia and the U.S." van
Houten told reporters.
Analysts, who had been hoping the firm would continue on a
recovery path after a surprisingly robust first-quarter report
earlier this year, welcomed the numbers.
"The second-quarter results were very strong, beating
(expections) on all lines, particularly at the clean earnings
before interest, tax and amortization (EBITA) level, essentially
driven by all three divisions, but particularly from
healthcare," said Sjoerd Ummels, ING analyst.
Healthcare sales were up 7 percent, boosted by sales of
hospital equipment like scanners. In growth economies including
India and China, sales rose 22 percent.
"I think what you can also see is that each of the three end
markets has so far performed better than the market anticipated,
also organically which shows that Philips has demonstrated to be
very competitive despite challenging markets," Ummels added.
Philips' shares were up more than 7 percent in morning
trade, hitting the highest level in nearly a year.
Disposing of the audio and video unit, called Lifestyle
Entertainment, would show that Philips is cleaning up the last
unattractive parts of its portfolio of companies, according to
SNS analyst Victor Bareno.
Like the TV unit that Philips sold in late 2011 the audio
and video unit - which includes DVD and MP4 players - faces
stiff competition from lower-cost Asian rivals flooding the
As expected Philips, didn't give a detailed outlook for the
remainder of the year but reiterated its previous guidance for
2013 of 4-6 percent sales growth, EBITA margins for the group of
10-12 percent and 12-14 percent return on invested capital.
Philips, best known to consumers for its electric
toothbrushes, TVs, wake-up lights and coffee makers, competes
with Samsung and LG Electronics among
others in consumer electronics, and with General Electric
and Siemens in the hospital and lighting markets.
Earnings before interest, tax and amortization (EBITA) rose
to 450 million euros in the second quarter from 371 million the
year prior. Each of the three units, healthcare, lighting and
consumer reported higher sales while healthcare and consumer
reported higher EBITA for the quarter.
Net profit was 167 million euros, above the 118 million
analysts surveyed by Reuters had forecast. Group sales rose 5
Philips also said its 400 million euros ($487 million) cost-
savings program for 2012 is on track.
(Reporting by Roberta B. Cowan; Editing by Erica Billingham)