James Delahunty
15 Apr 2008 0:01
Philips, one of the best known consumer electronics companies on the planet, witnessed its first quarter profit drop 75 percent due to bad performing sales of television sets, particularly in the United States. Royal Philips Electronics NV reported $347 million net income, about 20 percent lower than the $433 million that analysts put out previously.
Net profit was $1.386 billion in the same period last year, boosted by the sale of the company's stake in Taiwan Semiconductor Manufacturing Co. Ltd. "The U.S. remains the black spot, but when we look at the quarter it was tough all across," Chief Financial Officer Pierre-Jean Sivignon said in a conference call.
Last week, the company announced that it will license Funai Electric Co. Ltd. of Japan to market the Philips and Magnavox brands for five years in North America. In Europe, the Philips brand is much stronger than it is in the United States, but the company still lost money on TV sales and is unlikely to show any profit in the territory.
"Unfortunately our results are clouded, more than we like, by the adverse situation in our TV business and lower revenue from license agreements," Chief Executive Gerard Kleisterlee said.