Philips Profits Up Sharply on Strong Sales

THE HAGUE, Netherlands -- Royal Philips Electronics(PHG), the world's largest maker of lights, said Monday its second-quarter profit rose sharply, thanks to strong sales at its lighting and consumer electronics divisions, particularly in emerging markets.

Net profit was €262 million ($340 million), up from €45 million in the same period a year ago. Revenue rose to €6.19 billion from €5.23 billion a year ago, when the company was hit hard by the global economic crisis.

"It is encouraging to see that our performance continues to improve, despite ongoing weakness in many global markets and economic uncertainty," said CEO Gerard Kleisterlee.

The company said it expects sales growth to ease off for the remainder of 2010, in part because many consumers -- particularly in football-mad Latin America -- bought new televisions ahead of the World Cup that finished earlier this month in South Africa.

"After the strong rebound in the first half of the year, we expect comparable sales growth in the remainder of the year to moderate towards mid-single-digit level," the company said in a statement. "This reflects continued but slow recovery in the U.S. and Europe, different seasonality for our television business following soccer's World Cup, and the improved sales performance in the second half of 2009."

Consumer electronics led the way for Philips, with revenues in that division rising 20% to €2.18 billion ($2.83 billion) from a year earlier on strong sales of flat screen televisions.

The company's lighting division saw revenue rise 13% to €1.86 billion.

Growth was strongest in emerging markets and particularly the so-called BRIC nations -- Brazil, Russia, India and China. Revenue in emerging markets rose 29% to €2.1 billion -- 34 % of the company's total revenues. In the same period last year, emerging markets revenues made up 29% of worldwide revenue.

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