Philips net profit slumps 27% in first quarter
Consumer electronics company ROYAL Philips NV has reported that its net profit declined by 27% to 100 million euros in the first quarter of 2015. According to the company, the net profit has slumped as higher restructuring costs wiped out gains from higher sales.
Philips, which is the biggest lighting maker in the world, stated that sales of the company rose 14% to about 5.34 billion euros. Strong growth from the company’s ‘Consumer Lifestyle’ has helped the company to see rise in the sales. The ‘Consumer Lifestyle’ division of Philips includes kitchen appliances, dental hygiene and hair removal tools. The company has reported fall in its healthcare and lighting divisions.
Last year, the company headquartered in Amsterdam announced its up-to 400-million-euro plan. As per the plan, the company will split off its lighting business and create two separate companies. With the move, the company wants to make it easier for a dominant seller of LED lights to break into new markets.
While announcing drop in net profit, Philips, which began life as a lighting company in 1891, stated that net profit dropped to about 100 million euros in the first quarter of the current year. In the same period a year earlier, the company had net profit of about 138 million euros. In the first three months of 2015, sales were 5.34 billion euros, up 14% from 4.69 billion euros last year, the Dutch electronics giant added.
Frans van Houten, Chief Executive Officer of Royal Philips Electronics, said, “We are encouraged by the resumption of sales growth in the first quarter of 2015, which was driven by continued strong performance in Consumer Lifestyle and positive comparable sales growth in Healthcare. “
The company has been planning to leave its more than hundred-year old lighting business to focus on selling consumer lifestyle products and medical-equipment.