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Philips Posts Income Drop, Lower Sales

Amsterdam, The Netherlands – Royal Philips Electronics reported overall
lower income and sales for the second quarter, ended June 28.

Overall net income was down 94 percent to 45 million euros, and
sales were down 19 percent to 5.23 billion euros.

Consumer lifestyle division sales fell by 30 percent on a
comparable basis caused by strong declines in TV, video and audio products. TV
sales were 587 million euros in the quarter, a more than 50-percent drop from
the prior year’s second quarter. The TV segment reported a 99 million euro net
loss, lower than then prior year’s 117 million euro loss.

In connection with its plans to further improve the profitability
of its TV business, Philips plans restructuring charges of about 40 million
euros in the third quarter.

The company also strongly objected to charges brought against its
former joint venture LG Philips LCD (now LG Display) by the European Commission
in May for alleged price fixing. Philips, which sold its remaining stake in the
venture in March, “intends to vigorously oppose the allegation,” the company