Royal Philips Electronics (PHG) reported earnings of 27 cents per share for the third quarter of 2009, below the Zacks Consensus Estimate of 38 cents.
Sales amounted to $8.04 billion, a decline of 11% on both nominal and comparable bases.
Healthcare sales declined by 4% on a comparable basis due to declines at Clinical Care Systems, Imaging Systems and Healthcare Informatics.
Consumer Lifestyle sales fell by 15% on a comparable basis, due to declines in all businesses except Health & Wellness.
Lighting sales declined by 13% on a comparable basis, led by double-digit declines at Professional Luminaires, Lighting Electronics and Automotive Lighting.
In mature markets, double-digit declines at Lighting and Consumer Lifestyle were offset by a mid-single digit decline at Healthcare.
Sales in emerging markets showed sequential improvement although it remained 11% below the level achieved in the corresponding prior-year quarter.
The Group cash balance increased by €145 million to €3.7 billion, driven by free cash inflow of €353 million, partly offset by €172 million in payments for acquisitions. Operating activities generated cash inflow of €470 million compared to €210 million in the corresponding quarter of prior year.
Inventories as a percentage of sales rose by 70 basis points to 14% at the end of the quarter. Net debt at the end of the quarter amounted to €0.6 billion compared to €1.5 billion at the end of the prior-year quarter. Group equity remained stable at €13.4 billion.
Royal Philips Electronics, headquartered in the Netherlands, integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. Major competitors include Sony Corporation (SNE), General Electric Company (GE) and Panasonic Corporation (PC).
We currently have a Neutral recommendation on PHG.
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