Royal Philips enjoys strong earnings growth but warns of ‘headwinds’

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DUCTH lighting and consumer electronics firm Royal Philips Electronics said that its earnings more than doubled in the third quarter, thanks to modest growth in all its business lines – and the disposal of its loss-making television business.

Net profit was 169 million euros, up from 74 million euros in the same period a year ago, when Philips recorded a 54 million euros loss on its television business. Sales rose 3.4 per cent to 6.13 billion euros.

Philips, the world’s largest lighting maker, said nearly a quarter of all lights sold are now LEDs.

The company’s performance differed strongly by geography. In mature economies sales of consumer products and lighting sales dipped but sales of medical imaging machines grew. In developing economies sales were up 10 per cent in all categories.

Despite the upbeat trading performance, chief executive Frans van Houten said the company is facing stiff “headwinds” with its biggest market, Europe, in decline, China growing more slowly, and the US market showing “more and more uncertainty related to elections and the so-called ‘fiscal cliff’ ”.

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