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Philips Sees No Semiconductor Upturn, Cites Weak Consumer Market
European consumer electronics giant Philips described the outlook in somber terms as it turned in profits on revenues that came in in line with expectations in the second quarter.
LONDON European consumer electronics giant Philips described the outlook in somber terms as it turned in profits on revenues that came in in-line with expectations in the second quarter.
Profits at Royal Philips Electronics NV (Amsterdam, The Netherlands) were buoyed by the sale of shares in Navteq Corp., which yielded a non-taxable gain of 753 million euro (about $908 million). Without that the companys sales would have reduced and the company said weak consumer spending in Europe and a slowing economic environment around the world, made the company cautious for the future.
Philips made a net income of 983 million euros (about $1.18 billion) in the second quarter on revenues of 7.09 billion euros (about $8.54 billion) down 3 percent on the same quarter a year before.
Net profit rose to 983 million euros (about $1.18 billion) in the second quarter, up from 616 million euros a year earlier, but the company said the rise was entirely attributable to the sale of its shares in navigation systems company Navteq Corp. for 753 million euros (about $906.4 million).
In the semiconductor sector, sales were sequentially higher by 3 percent in dollar terms. The company said it expected a further increase in single-digit percentage growth in dollar terms in the third quarter of 2005. The companys semiconductor manufacturing capacity utilization rate improved slightly from 75 percent to 77 percent.
For Semiconductors [division] we do not expect to see any significant upturn in market conditions in the short term, the company said in a statement. Semiconductor sales were 6 percent lower than in the same quarter a year before at 1.09 billion euro (about $1.31 billion).
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