Philips Q4 profit dips on one-off charges

Dutch electronics giant Philips reported a drop in fourth-quarter profit due to one-off charges.

Dutch electronics giant Koninklijke Philips Electronics reported Monday a drop in fourth-quarter profit due to one-off charges.

Net income in the fourth quarter fell to Euro 332 million ($AU521.7 million on Dec. 31, the last day in the period being reported) from Euro 498 million in the same period the year before, in accordance with U.S. generally accepted accounting principles (GAAP), the Amsterdam manufacturer said in a statement.

One-off charges included Euro 458 million in costs related to LG Philips LCD Co. and a Euro 240 million tax payment linked to transferring its stake in contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC).

Fourth-quarter sales rose 6 percent to Euro 9.52 billion from Euro 8.95 billion a year earlier. The group's medical systems, semiconductor and consumer electronics divisions contributed to the comparable sales growth.

At the semiconductor unit, fourth-quarter sales rose 9 percent to Euro 1.33 billion from Euro 1.12 billion the year before.

In December, Philips announced plans to separate its chip manufacturing operations, in a move that could see the unit merge with a rival.

Sales in the Dutch manufacturer's core consumer electronics business grew 6 percent to Euro 3.47 billion in the fourth quarter from Euro 3.34 billion the year before. The unit benefited, in particular, from strong demand for flat displays.

In 2005, Philips posted net income of Euro 2.87 billion, compared to Euro 2.84 billion the year before. Full-year sales grew 4 percent to Euro 30.4 billion from Euro 29.35 billion a year earlier.

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John Blau

IDG News Service
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