Philips Electronics’ fourth-quarter profit more than doubled partly because of lower corporate taxes. Sales fell, but the Dutch company’s move away from consumer electronics and into more stable and higher margin businesses helped boost the quarterly net profit to 680 million euros. Chief Executive Gerard Kleisterlee said Philips was entering “a new period in the company’s history” in which earnings would be less volatile.
Consumer electronics now accounts for 55% of its business, 27% is hospital equipment – such as X-ray machine – and the lighting division has 18%. Turnover for all of last year was 26.9 billion euros, which generated profit of 5.3 billion. The company’s sales growth target for this year is 5% to 6%.
Sales have declined since Philips sold all but 19.9% of its semi-conductor business to private equity investors last September. It also owns 16% of the Taiwan Semiconductor Manufacturing Company and a third of South Korean Liquid Crystal Display flat screen maker LG. Philips said any proceeds from selling those stakes would be used for more share buybacks or acquisitions. The company’s shares initially rose, but ended the day down 1.7%.