MUNICH (02/17/2000) - Royal Philips Electronics NV today reported improved income from continuing operations both for the full year 1999 and in its fiscal fourth quarter, ended Dec. 31, 1999, partly due to better results at its consumer products division.
Income from continuing operations at the Dutch conglomerate totalled 687 million euros (US$682 million) in the fourth quarter of 1999, compared to a loss of 308 million euros in the corresponding period a year ago, according to a statement from Philips.
Philips attributed the improvement largely to better results at its consumer products division, which saw increased sales of mobile phones and PC peripherals. The consumer products division also had seen poor results in 1998, a result of costs associated with its failed mobile phone venture with Lucent Technologies Inc, Philips said in a statement today.
Net income in the fourth quarter plummeted to 687 million euros, compared to 4.68 billion euros in the fourth quarter of 1998, but the figures were skewed by the sale in 1998 of it's 75 percent share in record company Polygram NV to Seagram Company Ltd, Philips said.
Fourth-quarter sales revenue rose four percent compared to the same period the previous year. The gain was largely due to improved sales of semiconductors, Philips said.
For the full fiscal 1999 year, income from continuing operations rose to 1.80 billion euros, or 5.24 euros per share, up from 541 million euros, or 1.50 euros per share, in the previous fiscal year. Operating income was positively affected by improved results in consumer products as well as the sale of its passive components division, Philips said.
Net income for the year fell to 1.80 billion euros, or 5.22 euros per share, compared to 6.05 billion euros and 16.81 euros, respectively, for 1998.
Sales in 1999 grew three percent to 31.46 billion euros, up from 30.46 billion euros. Sales were most robust in North America and Asia-Pacific, increasing only slightly in Europe, Philips said.
Philips considerably improved the overall profitability of its continuing operations in 1999, and Philips Semiconductors also saw a strong upturn in sales in the second half of 1999, Philips said. During the year, the company also undertook a restructuring, closing its business electronics division and merging part of that into its consumer electronics business. [See "Philips Shuts Business Electronics Division," June 4, 1999.]Philips is involved in a wide range of businesses, including consumer electronics, components, semiconductors, medical systems, business electronics, IT services, lighting, and domestic appliances.
The company said it expects to achieve double-digit earnings growth and positive cash flow in 2000.
Separately today, Philips said it will propose a four-for-one split of its stock at its upcoming shareholders meeting on March 30. If approved, the stock split is expected to take place by the end of April, Philips said.
Following the release of the results, Philips shares surged in morning trading at the Amsterdam stock exchange rising to 178.4 euros, up nearly six percent from yesterday's closing price. Trading in the Philips stock was halted in midmorning, however, due to technical problems at the Amsterdam exchange.
Philips Electronics, in Eindhoven, the Netherlands, can be reached via the Web at http://www.philips.com/.