Philips Earnings Soar 400% In 97
Dutch electronics giant Philips Electronics on Thursday reported a jump of over 400 percent in 1997 earnings, as most divisions turned in a strong performance, and gave an upbeat forecast for 1998.
Philips said net profit from normal operations surged to 3.29 billion guilders ($1.6 billion) from 723 million in 1996, outstripping analysts estimates of just above three billion guilders.
Most products divisions are showing strong operating performance. As a result, we expect to show improved earnings for the year 1998, the group said in a statement. Total 1997 net scored an all-time high of 5.73 billion guilders after a 1996 loss of 590 million, helped by extraordinary income of 2.44 billion guilders, the bulk from Philips sale of a stake in Taiwan Semiconductor Manufacturing Company .
In the fourth quarter, Philips managed to turn a 1.42 billion guilder normal profit from an 81 million guilder loss a year earlier and a 2.67 billion total profit from a 949 million loss.
But the firm sounded a note of caution for the first half of the current year, casting a wary eye at Asia and Brazil where it predicted continuing weakness in the early part of the year.
We expect to incur losses in our consumer communications business, Philips said. It predicted weakening local demand would take its toll on Asian markets affected by recent financial turmoil but ruled out significant damage to overall earnings.
Less than four percent of Philips turnover is in the nations at the centre of Asias currency crisis - Indonesia, South Korea, Thailand, Malaysia and the Philippines. Analysts gave a positive assessment of Philips performance. These are excellent results...all divisions have performed about as we had expected. The only division which differed was consumer products, but nothing dramatic, said Stephen Vrolijk at ING Barings.
He planned to maintain his buy rating on Philips shares and expected to up his 1998 earnings per share estimate.
Philips will raise its 1997 dividend payment to two guilders per share from 1.60. Net sales for the year climbed to 76.45 billion guilders from 69.20 in 1996.
Sales in the fourth quarter were 24.19 billion guilders after 21.41 billion in the year ago period.