Philips Q1 CE Sales Jump 13%

By Jeff Malester -- TWICE, 4/18/2006

Amsterdam, The Netherlands — Strong sales in connected displays, driven by the accelerating transition from tube TVs to flat-panel displays — as well as strong growth in peripherals and accessories — fueled a 13 percent increase in consumer electronics sales at Philips Electronics in the first quarter, coming in at $3 billion, up from a year-ago $2.6 billion.

Adjusted for the effects of currency movements, comparable sales in the CE segment climbed 16 percent in the first quarter, compared with the same period the prior year.

The consumer electronics segment also posted an operating profit of $131.8 million in the three months, ended March 31, compared with a $361.1 million operating loss in the first quarter of 2005.

The company is looking ahead to introduction of an extensive new range of monitors and flat-panel TVs in the second quarter of this year, including models with its “innovative” four-side Ambilight feature.

Capital expenditures in the CE segment remained at $22 million in the first quarter, the same as the first three months in 2005.

From a geographical perspective, Philips said North America recorded double-digit growth, with this region now accounting for 21 percent of total sales. Sales to North America reached $2.3 billion in the first quarter, up 12 percent from the same quarter last year.

Consolidated Philips sales in the first quarter soared 14 percent, reaching $9 billion, up from a year-on-year $7.9 billion, driven by strong growth in all main divisions. Adjusted for the effects of currency movements and consolidation changes, comparable sales increased 10 percent in the first quarter.

Consolidated net income in the first quarter increased to $195.2 million, compared with a year-earlier $142.7 million. The increase was lower than forecasts due to a one-time charge of $54.9 million at the company’s bankrupt TV and monitor tubes display joint venture, called LG.Philips Displays. The move upward was primarily attributed to improved performance of the company’s main business segments, particularly semiconductors and lighting.