Dutch electronics giant Koninklijke Philips NV (ADR) (NYSE:PHG) (AMS:PHIA) reported a three-fold jump in net profit on Monday for the second quarter, boosted by demand for smart lighting, household appliances and health care equipment.
Net profit reached 317 million euros ($416 million), up from 102 million euros during the same time last year. Sales for the three months ending June amounted to 5.65 billion euros, a 1.4 percent increase year-on-year, thanks to stronger sales of consumer products like shavers in emerging economies. Sales in emerging economies grew by 12 percent.
“We are pleased that in the second quarter our operational results improved year-on-year for the fifth quarter in a row in a challenging economic environment,” chief executive Frans van Houten said.
Philips best performer was digital LED lighting
The group’s best performer was digital LED lighting which showed a 28 percent jump in sales over the previous year. It made up 25 percent of the group’s total lighting sales which reached 2.04 billion euros for the second quarter.
Koninklijke Philips NV (ADR) (NYSE:PHG) (AMS:PHIA) has been selected as a provider of advanced lighting systems for next year’s FIFA World Cup football tournament in Brazil, including the interior, exterior and architectural lighting for the Maracana, Rio de Janeiro’s main stadium.
Philips health and lifestyle sector
Koninklijke Philips NV (ADR) (NYSE:PHG) (AMS:PHIA) is traditionally known for making televisions, small appliances and light bulbs but has in the last decade branched out to the health and lifestyle sector.
In the consumer lifestyle sector, Philips said it has successfully introduced a number of new products including a noodle maker and air purifiers to China, while a new three-in-one male electronic shaver and kit was driving sales in North America.
Koninklijke Philips NV (ADR) (NYSE:PHG) (AMS:PHIA) said orders were up 7.0 percent for health care products, lifted by the launch of a new range of X-ray machines and the recent $300-million alliance with the a U.S. medical center to supply medical equipment over the next 15 years.
Despite the deals, Philips pointed out that overall sales in health care remained flat, especially in western Europe, where there was a slight dip in equipment orders.
Better operating results across all sectors
The company stated that the increase in net income reflected better operating results across all sectors, lower restructuring and acquisition related charges, and higher past-service pension cost gains in the second quarter of 2013 compared to the year-ago period.
Earnings Before Interest, Tax and Amortization or EBITA was 603 million euros, which included 78 million euros past-service pension cost gain in the U.S. EBITA excluding restructuring and acquisition-related charges and other gains were 530 million euros.