said third-quarter earnings rose sharply from last year thanks to proceeds from assets sales, but the company sent tremors through electronics and semiconductor circles with word of an unexpected demand slowdown.
The Dutch concern earned about $1.4 billion, or about $1.10 a share, in the third quarter, up from about $148 million, or 12 cents a share, last year. The latest quarter included two gains, one from the initial public offering of Navteg and one from the IPO of LG Philips LCD, that boosted income by about $882 million.
The good news largely ended there. Philips said its consumer electronics division lost about $18 million in the three months, reversing a second-quarter profit of $64 million, due to a demand slowdown that will take at least another quarter to unwind.
Consumer electronics margins "came under heavy pressure in a highly competitive consumer market," Philips said, with both its European and U.S. segments posting losses.
Philips overall revenue rose 3% from a year ago to about $8.68 billion, including an 11% rise in semiconductor sales to $1.67 billion.
The company forecast fourth-quarter semiconductor sales that are unchanged from the third quarter. In 2005, Philips expects the semiconductor industry to post sales growth in the single digits, and for its own rate to exceed that.