Philips' CE Profits Outperform Parent During Fiscal Q2
By Jeff Malester -- TWICE, 7/22/2002
AMSTERDAM, THE NETHERLANDS— Despite an overall widening loss in the second quarter at Dutch electronics giant Royal Philips, the company's consumer electronics segment reported a second quarter profit.
Although Philips mainstream CE revenue dropped about 7 percent in the second quarter ended June 30, to $2.2 billion, down from $2.4 billion in the year-ago period, the company recorded operating income of $13.1 million during the three months. This compares with an operating loss of $386.1 million in the second quarter of 2001.
"We are encouraged by the performance of our businesses, especially consumer electronics, where the actions to put the U.S. business back on track are showing early signs of success," said Gerard Kleisterlee, president/CEO.
Philips attributed the quarterly CE sales decrease to portfolio changes and the lower sales of wireless phones. However, television and DVD video sales grew strongly, said the company, more than offsetting lower sales of VCRs and monitors.
CE income from operations returned to positive numbers in the second quarter, helped by positive income in wireless phones and better performance in North America, said Philips.
The set-top box market was still suffering in the second three months, yet the company reported significant loss reductions at its Digital Networks division of the CE segment. License income was lower, related to compact disc activities, and impacted by unfavorable currency effects that were partially offset by higher revenue from DVD players and recordable CDs.
For the six months, mainstream CE revenue dropped about 10 percent, to $4.3 billion, down from $4.8 billion in the same period in 2001. However, Philips reported $6.1 million in mainstream CE operating income for the six months, compared with a $544.7 million operating loss in the previous six months.
Overall, Philips sales increased 5 percent, reaching $8.1 billion in the second quarter, up from $7.8 billion in the same three months in 2001. The company showed an overall net loss of $1.4 billion for the three months, up from a net loss of $778 million in the year-ago second quarter.
For the six months, overall sales dropped to $15.7 billion, down from $16.1 billion the previous year, while the company about doubled its net loss, hitting $1.4 billion, compared with $684 million year over year.
