Philips first quarter 2005 net income down €433
18 April 2005
Philips recorded net income of €117
million (€0.09 per share), compared with
net income of €550 million (€0.43
per share) in the corresponding period of 2004. The
€433 million decrease in net income was
due to a €435 million lower contribution
from unconsolidated companies. . Analysts disagree on whether the net income
drop was expected. The medical unit performed below expectations and the
semiconductor unit slightly better than expected.
Sales amounted to €6,635 million and
were flat compared to Q1 2004. The weaker US dollar and dollar-related
currencies, as well as various divestments, had a downward effect of 2%. On
a comparable basis, sales increased by 2%.
Income from operations amounted to €193
million, compared to €218 million in the
same period of 2004.
Financial income and expenses resulted in an expense of
€48 million, compared with an expense of
€66 million in Q1 2004.
Unconsolidated companies contributed €22
million to net income. In Q1 2004, results from unconsolidated companies
amounted to €457 million, which included
a dilution gain of €156 million on
Philips' participation in Atos Origin. LG.Philips LCD's contribution to net
income was a loss of €34 million,
compared to a profit of €215 million in
Cash flow from operating activities was an outflow of
€351 million. In Q1 2004, cash inflow
from operating activities totalled €404
Inventories as a percentage of sales amounted to 11.9%, compared to 12.1%
in Q1 2004.
"It's encouraging to see another solid quarter, with steady performance
and profitability in all our main businesses," said Gerard Kleisterlee,
Philips' President and CEO. "I am pleased with the progress being made in
Consumer Electronics, reflecting the successful implementation of our
Business Renewal Program. The cyclicality of the technology sector had a
negative impact, especially on our results from unconsolidated companies.
Overall, we are on track with our management agenda. Our strong pipeline
of market-driven, innovative products should position us well going