Philips Profits Beat Forecasts, CEO Warns Visibility Poor
Consumer electronics giant Philips announced forecast beating profits Monday, indicating that CEO Frans van Houten’s turnaround plan is beginning to pay off despite difficult market conditions.
Van Houten told CNBC’s “Squawk Box Europe” Monday that visibility is not very good. He added that the “general economy is not a friend.”
Philips’, second quarter net profits came in at 167 million euros ($202 million), up from a 1.19 billion euro loss in the same period in 2011. Analysts polled by Thomson Reuters had expected a second quarter net profit of 118 million euros.
Second-quarter sales also beat forecasts, coming in at 5.9 billion euros versus an expectation of 5.59 billion euros.
Van Houten said demand is strong in Russia, the Middle East and Asia and added that he is “happy” about growth in the United States.
Growth in Southern Europe remains a problem for Philips, like many other companies, although van Houten pointed out his healthcare team won a big order in Italy during the last quarter.
In the long-term, van Houten is confident the rise of the middle classes in emerging markets like China and India will drive demand for its healthcare and efficient lighting businesses.
He has been in charge at Philips since last year and has during that time issued two profit warnings, slashed jobs, revamped his executive team and exited the group’s loss-making TV operations.
Philips share price has had a volatile year but after rallying in late June now trades close to its 2012 highs.