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Philips posts gains, losses due to corporate disposals

Posted: 05 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Royal Philips Electronics? OEM? display? mobile display? John Walko?

The wind-down corporate investments at Royal Philips Electronics has led to both one-time gains and losses at the company that it plans to account for in its Q4 2006 results.

The closing of the Philips Sound Solutions (PSS) business unit to D&M Holdings Inc. of Japan will lead to a one-time earnings gain of around $56 million. The deal was completed on Dec. 31, 2006.

An OEM supplier of speaker systems, primarily to the automotive industry, PSS had 2005 revenues of approximately $158 million. As an OEM component developer and manufacturer, Philips considered its PSS subsidiary was no longer a core activity.

The company also announced that it will take a about $93 million non-cash impairment charge relating to the adjustment of the investment value of Philips' holding in TPO Display Corp. TPO focuses on mobile display technology, and Philips owns a 17.5 percent stake.

Philips Electronics merged its mobile display systems business unit with Toppoly Optoelectronics Corp. of Taiwan, late 2005. The other major shareholders in TPO are Compal Electronics Inc. at 25.1 percent, Philips at 17.5 percent and UniPresident Enterprises Corp. with 3.5 percent. The company said the charge was "triggered by a prolonged reduction in TPO's share price."

Philips is continuing to dispose of operations that no longer tie with its strategy to focus on healthcare, lifestyle and other technology activities in line with the Philips brand. Late last month the company sold, for an undisclosed sum, the manufacturing operations of its automotive playback modules business to Lite-On IT Corp. of Taiwan.

In November 2006, it announced it would sell its 24.8 percent stake in FEI Co, a supplier of tools such as scanning electron microscopes to semiconductor and nanotechnology device makers.

- John Walko
EE Times Europe

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