Weak TV sales drag down Philips Q1 earnings

The Netherlands' Royal Philips Electronics reported a sharp drop in first quarter profits, with falling TV sales in North America offsetting growth in its health care and lighting industries, an Associated Press report said.

Associated Press reported the world's largest maker of lighting saying its net income was €219 million (US$347 million), down from €875 million (US$1.3 billion) in the first quarter of 2007, when it had reported a net gain of €733 million (US$1.1 billion) for selling a stake in a Taiwanese semiconductor manufacturer, TSMC.

Overall sales rose 1% to €5.96 billion (US$9.44 billion), but comparable sales fell 9% in North America, mainly in TV and videos, Philips said. The recent quarter included a gain of €83 million (US$131 million) for the partial sale of LG Display.

CEO Gerard Kleisterlee said performance was strong across most sectors. 'Unfortunately our results are clouded, more than we like, by the adverse situation in our TV business' and lower revenue from licence agreements.

Analyst Jurgen Smits van Oyen of Petercam said the results were unimpressive, but no cause for excessive concern. Consumer products were disappointing, but that was balanced by 'positive surprises' in health care. 'On balance, we believe the company has released a fairly decent set of results given the economic circumstances,' he said.

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