Royal Philips Electronics NV earned more than the initial expectations during the third quarter though it remains “cautious” on sales for the last quarter of the year.
The biggest lighting company in the world, which has its headquarters in Amsterdam, Netherlands, posted a net income of 524 million euros, or $728 million, up from 174 million euros, or $243 million, a year earlier. The improvement is mainly attributed to the cost cutting measures and money earned from a 154 million-euro sale of its NXP Semiconductors NV stake.
Analysts had an estimate that the company would earn 358 million euros for the third quarter. The total earnings were 6.2 billion euros, or around $8.7 billion, in sales as they saw a surge of 1 percent.
Frans van Houten, who takes over as the Chief Executive Officer of the company in April, faces a number of challenges as he will have to keep the sales coming at a higher ratio. The company competes with General Electric Co. and Siemens AG, in the lighting and health-care sector and has already shed 6,000 jobs to increase profits.
The company shares dropped approximately 4.9 percent in Amsterdam to trade at 22.70 euros, or $31.8, indicating a total value of the company at 22.4 billion euros, or $31.3 billion. Before the announcement of earnings today, the company shares had surged more than 15 percent this year, compared with a 1.8 percent rally of the 25-member Amsterdam Exchanges Index.
The company forecasted that its earnings per share will grow at twice the rate of sales until 2015.
