Philips Profit Lifted by Weaker Euro

By Maarten van Tartwijk 

AMSTERDAM--Royal Philips NV said Monday that second-quarter net profit rose 13% as the Dutch electronics company benefited from a sharp increase in sales prompted by a weaker euro.

Philips said net profit for the three months ended June 30 was EUR274 million ($301 million), up from EUR243 million in the same period a year earlier. Sales rose 20% to EUR5.97 billion, up from EUR4.97 billion a year ago. The results beat analysts' expectations and were fueled by the weaker euro against other global currencies, which provided a sharp boost to sales. Comparable sales, which exclude the impact of currency shifts, rose 3%, in part due to improvements in North America, Central and Eastern Europe and India.

The Amsterdam-based company, which makes everything from hospital scanners to coffee machines, warned that it is increasingly concerned about the global economy, largely due to a slowdown in China, Russia and Latin America. For 2015 it continues to expect modest sales growth, it said.

Philips reiterated that it aims to exit its 124-year-old lighting business in the first six months of 2016, most likely through an initial public offering. The company said costs related to the separation of the division will total EUR200 million to EUR300 million this year, lower than its previous estimate of EUR300 million to EUR400 million.

Write to Maarten van Tartwijk at [e-mail]

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