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Philips 1Q profit doubles
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April 19, 2000: 5:00 a.m. ET
Dutch electronics firm posts bumper earnings; to hand back $1.6B
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LONDON (CNNfn) - Europe's largest chipmaker announced bumper first-quarter earnings Wednesday, and promised to hand back  1.7 billion ($1.6 billion) to shareholders.
Philips Electronics unveiled a larger-than-expected rise in net profit to 1.14 billion from 469 million in the corresponding period last year. One-time gains flattered the comparison, but even excluding the non-recurring profit, income from operations jumped 92 percent to 619 million. Analysts, on average, expected profit of 487 million excluding one-time items, with even the most optimistic forecast only at 554 million.
Revenue for the quarter rose 22 percent to 8.33 billion, while earnings per share (reflecting a four-for-one stock split that took effect last week) rose to 0.86 from 0.32.
The company also announced plans to buy back a further 3 percent of its capital, effectively returning 1.26 per share to investors. The company undertook a similar buyback program in 1999.
"I'm very impressed by the result -- it's blown my forecast and everyone else's out of the sky," Navdeep Sheera, an analyst at Salomon Smith Barney in London, told Reuters. Philips shares jumped 5 percent to 44.15 in early trading on the Amsterdam stock exchange Wednesday. The shares have risen from 10 in October 1998, when the company was believed to be in serious danger of going out of business.
The profit rise enabled Philips to reiterate its earlier predictions of double-digit growth in earnings for this year as a whole.
The firm, Europe's largest maker of consumer electronics as well as semiconductors, attributed the surging performance to accelerating sales growth in semiconductors, components, domestic appliances and consumer communications. The only real laggard among its many divisions was its information technology services unit Origin. The unit, which suffered from poor market conditions in the aftermath of the rush to beat the millennium bug, did little more than break even.
The semiconductor division provided the largest individual contribution to the bottom line, increasing operating profit 20 percent to 241 million. Despite Philips' forays into many other high-technology areas, its original business, lighting, remains its second-biggest earner, generated first-quarter operating earnings of 205 million, up 15 percent. 
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Philips Electronics
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