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Philips's restructuring continues to bear fruit

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Philips's restructuring continues to bear fruit
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Dutch electronics giant Philips share price posted the biggest increase on the Amsterdam stock market on Monday thanks to quarterly results above expectations.

The group has indeed improved its profitability year-on-year.

Net earnings more than doubled at 170 million euros in the third quarter. As for revenue, it bounced up 14 percent, boosted by strong demand in emerging markets. This made up for a weak rise in sales in the US, and slightly decreasing sales in Europe.

The other good news is that revenue has increased in all the group’s divisions: medical systems, lighting and even in consumer electronics, the unit with the lowest margins.

These results are all the more remarkable given how severe Philips’ losses were in 2011. In order to recover, the group has cut thousands of jobs, reducing its costs and has refocused on innovation in its lighting and medical equipment units. It is a strategy praised by investors: Philips’ share price is up more than 20 percent so far this year.

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