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Although fourth-quarter margins continued to remain under pressure at Philips, mainly in flat-panel televisions and DVD recorders, overall consumer electronics margins recovered from third-quarter levels and CE sales enjoyed three-month increases.
Philips CE sales climbed 9 percent in the fourth quarter, ended Dec. 31, hitting $4.4 billion, up from $4 billion in the year-ago period. Income from operations for the CE business rose to $345.2 million from a year-earlier $325.6 million.
Philips reported that accelerated digitalization of the CE product mix, new entrants and new business models put severe pressure on gross margins, which could not be fully offset by higher sales volumes and reduced costs. In order to further improve its CE business, Philips plans to transfer its monitor display business and part of its flat-panel display business to a Taiwan-based company.
Sales to the United States for the 12 months dropped to $9.2 billion, down from $9.8 billion for all of 2003.
For the 12 months, CE sales jumped to $13 billion from $12 billion year-on-year, while income from operations reached $472 million, up from $324.3 million in 2003.
Consolidated Philips fourth-quarter sales came in at $12 billion, up 2 percent, compared with $11.8 billion in the same three months a year earlier.
Consolidated net income for the fourth quarter reached $651.2 million, down 17 percent from a year-ago $781.9 million.