Philips Electronics missed analysts' forecasts on Monday with a fall in third-quarter core profit, depressed by disappointing LCD display sales and asbestos charges, hurting its shares.
Shares of the Dutch TVs-to-hospital equipment maker fell 0.7 percent, as revenues slipped from a year earlier and core operating profit, excluding various charges, rose slightly.
Net profit was 4.24 billion euros ($5.3 billion), including a gain, also of 4.24 billion euros, on the sale of its semiconductors business. Excluding the chip unit sale, analysts had expected 257 million euros net profit, according to the median of 15 forecasts compiled by Reuters. The results were hit by an unexpected charge of 265 million euros for asbestos-related liabilities dating back to the 1970s, which should cover the company until 2016.
Net profit a year earlier was 1.436 billion euros, with one-off gains of well over a billion euros. Chief Financial Officer Pierre-Jean Sivignon said comparisons with the previous year were difficult due to the avalanche of exceptional items.
With 3.4 billion euros of net cash, the company confirmed plans to hand back 4 billion euros to shareholders through share buybacks, and said it would buy shares worth 2.5 billion euros before the end of the year and the rest next year. Philips shares were down at 27.73 euros at 0930 GMT, underperforming a flat Eurotech index.
The maker of shavers, televisions, lamps and x-ray machines is the third major electronics company to publish results after rivals General Electric of the United States, which posted increases of 12.3 percent in sales and 6 percent in earnings, and Samsung Electronics with mixed results.
Revenues undershot expectations, falling to 6.31 billion euros from 7.62 billion a year earlier and compared with a median analyst forecast of 6.53 billion. The decline was the result of the sale of the semiconductor business in the quarter.
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