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Philips predicts flat semis sales to end of 2004

Posted: 15 Oct 2004 ?? ?Print Version ?Bookmark and Share

Keywords:philips electronics? semiconductor? lg philips? lcd?

Philips Electronics said in Tuesday (Oct. 12) that it expects flat sales of semiconductors for the fourth quarter of this year, and that fierce competition would continue to erode margins at its consumer products division.

The forecast came as the company reported 'solid' third-quarter results in line with market expectations. Net profits were Euro1.2 billion ($1.47 billion) compared with Euro124 million ($152 million) in the same period last year, lifted by net gains from the initial public offerings of Navteq, a company specializing in digital mapping technology and LG Philips, the LCD flat screen maker.

Sales were 3 percent ahead at Euro7.2 billion ($8.8 billion). The company said that stripping out the effects of the weaker U.S. dollar, comparable sales would have risen 8 percent.

"Q3 was another solid quarter for Philips, with results improving across a broad front. In fact we would be pleased if it were not for Consumer Electronics (CE), where product margins, especially in flat TV and DVD+RW, came under heavy pressure in a highly competitive consumer market," said Gerard Kleisterlee, president and chief executive.

For the semiconductors division, Philips predicted sales would be flat as orders slowed in the current quarter, compared to the previous three months when sales rose 2 percent. Continued cost cuttings and one-off gains meant the division managed to turn losses of Euro191 million last time into operating profits of Euro186 million. Despite a slight recovery in the fourth quarter thanks to Christmas sales at the consumer electronics division, Philips said it would accelerate its restructuring program and increase cost-cutting at the unit.

- John Walko

EE Times

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