October 19, 2017 / 6:53 AM / a year ago

Philips Lighting third quarter operating profit rises marginally

AMSTERDAM (Reuters) - Philips Lighting (LIGHT.AS), the world’s largest lighting maker, reported a marginal rise in third-quarter core profits on Thursday, meeting analysts’ estimates.

FILE PHOTO: Journalists follow a presentation of Philips at the IFA Electronics show in Berlin, Germany August 31, 2017. REUTERS/Hannibal Hanschke/File Photo

Sales fell by 3.5 percent to 1.75 billion euros. Adjusted earnings before interest, taxes and amortization (EBITA) were at 176 million euros ($207 million), up from 175 million euros in the same period and exactly in line with analysts’ estimates.

Net profit of 110 million euros included a 21 million gain on the sale of real estate.

Sales and profits increased at all three of the company’s other, less profitable divisions - LED lights, professional lighting, and home networking, it said.

CEO Eric Rondolat told reporters the quarter was noteworthy because for the first time growth in like-for-like sales at the three other divisions outweighed falling sales in the bulbs business.

He said investors could continue to expect small real estate gains as the traditional bulb business shrinks and Philips closes factories and opportunistically sells property.

The company’s professional arm was the best performing division, increasing its operating profits by 27 million euros, despite weakness in the United States.

Rondolat said U.S. demand from the housing industry and small and medium businesses was continuing to lag.

“Our customers are not making investment decisions as quickly as they used to,” he said.

On the other hand, the company was winning larger, often high-profile contracts for networked lighting projects, he said.

(This story removes reference to real estate sale, paragraph 1; corrects to read “Net profit of 110 million euros”, paragraph 3.)

Reporting by Toby Sterling; editing by Gopakumar Warrier, Greg Mahlich

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