Philips Electronics said on Tuesday it returned to the black in 2003, with net profit well up on forecasts, boosting its shares as it expressed cautious optimism for 2004.
Europe's biggest producer of consumer electronics and lighting, and number three in semiconductors, booked a full-year net profit of 695 million euros ($885 million), much stronger than the 537 million estimated in a Reuters poll of 16 analysts, and following its 3.2 billion euro record loss of 2002.
It said its recovery was aided by 1.1 billion euros of cost savings over 2003, some 100 million more than targeted, and strong Christmas sales. It benefited from a lower than expected tax bill and a strong profit contribution from unconsolidated companies in Asia which make chips and flat displays.
The company reported a full-year operating profit of 488 million euros, falling short of expectations of 542 million. Philips blamed a lower level of sales of businesses and real estate and higher pension costs.
Hurt by the weak dollar, full year sales dropped to 29.04 billion euros from 31.82 billion, but came in above expectations of 28.44 billion on booming chip and consumer electronics sales.
Philips hoped for an easier and better 2004.
"Our task is to maintain this momentum while steadily improving our earnings as we move through 2004. We're better than ever positioned to deliver on our targets," Chief Executive Gerard Kleisterlee told a news conference, adding he targeted revenues of more than 30 billion euros in 2004.
Despite the absence of an outlook for the traditionally weak first quarter, investors drew comfort from Philips' pledge to return to an overall operating margin of between seven and 10 percent within two to three years.
As Philips had promised, the semiconductor unit, which makes chips for mobile phones from Samsung and Nokia, returned to profit after almost three years and over two billion euros of losses.
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