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Philips Semiconductors’ €38 million income gap |
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Oct 17, 2005 at 03:03 PM |
By Dr Mike Cooke
Although the Philips Group as a whole claims "strong growth" in the
third quarter, its Semiconductors division experienced problems. The
year-on-year comparison for group sales shows growth of 5% nominal and
4% currency-adjusted. However, Philips Semiconductors' revenues
increased at only 2% on a nominal basis that converts to a 1% decrease
when US exchange rates are taken into consideration.
In money, Semiconductors made sales of €1.193 billion in third quarter
2005 compared with 2004's €1.168 billion. Operating income in the
quarter fell from 2004's €179 million to €90 million in 2005. The
company points out that the 2004 income includes a gain of €51 million
from a property damage insurance settlement relating to a facility in
Caen, France. This still leaves a gap of €38 million.
Group capital spending reductions of €23 million in the quarter mainly hit the Semiconductors and Lighting divisions.
The company points to improved sales of 7% in US dollar terms over the
second quarter 2005. Gerard Kleisterlee, Philips president and CEO,
sees this as an improvement based on the company's "renewal programme".
The company expects fourth quarter sales to increase around the same 7%
in US dollars over the quarter just ended. In 2004, Philips
Semiconductors experienced a decline in sales between the second
(€1.418 billion) and third (€1.388 billion) quarters.
The US dollar exchange rate into euros has improved (more euros/dollar)
from around $1.3/€ in January to about $1.2/€ now. Last October, the
euro exchanged for around $1.25.
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