Philips Electronics recorded a third quarter net income of 1.436 billion euros (approx. U.S. $1.728 billion) compared with net income of 1.172 billion euros (approx. $1.410 billion) during the same period in 2004. The increase was primarily attributed by Philips to the sale of several stakes that yielded a combined non-taxable gain of 1.086 billion euros (approx. $1.306 billion). The third quarter of 2004 included a 635 million euro (approx. $764 million) non-taxable gain related to the NAVTEQ IPO.
Royal Philips Electronics of the Netherlands, one of the world's biggest electronics companies, said sales increased to 7,626 billion euros (approx. $9.173 billion), 5 percent above third-quarter 2004. Adjusting for currency movements and consolidation changes, the company said comparable sales increased by 4 percent, driven by strong growth in all main product divisions except Semiconductors. Sequential sales of semiconductors did, however, increase by 7 percent in U.S. dollar terms, Philips said.
Income from operations amounted to 442 million euros (approx. $531 million), compared to 1.019 billion euros (approx. $1.224 billion) in the same period of last year. The third quarter of 2004 included the gain related to the NAVTEQ IPO and a 51 million euros (approx. $61 million) property damage insurance settlement. The current quarter included a 136 million euros (approx. $163 million) gain on completion of the deal with TPV Technology.
Financial income and expenses resulted in income of 190 million euros (approx. $228 million), an improvement of 260 million euros (approx. $312 million) compared to Q3 2004. The improvement, Philips said, resulted mainly from the sale of remaining stakes in Atos Origin and Great Nordic.
"After a slower first half-year, we are pleased to see growth across Philips has picked up in the third quarter as we improved our profitability," said Philips' President and CEO Gerard Kleisterlee. "Thanks to the solid underlying performance during the quarter, we are on track with our financial targets and delivering on our commitments. We were able to outperform weaker consumer markets thanks to innovative product concepts like the new Flat TV and shaver ranges. We also saw improving results from our Semiconductors business as our renewal program begins to take effect. In addition, our Medical Systems business continued to show strong revenue growth.
"During the quarter, we made progress in implementing our strategy by further reducing our stakes in other companies. We used some of the proceeds to acquire Stentor, a leading healthcare IT company, and to support our share buy-back program. We also announced a significant investment in the emerging technology of solid-state lighting through the planned acquisition of a further 47-percent stake in Lumileds."
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