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Philips tops 3Q forecasts
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October 17, 2000: 4:54 a.m. ET
Dutch chip, electronics titan says profit soars amid boom in key units
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LONDON (CNNfn) - Royal Philips Electronics NV, one of Europe's top semiconductor and consumer electronics makers, reported Tuesday third-quarter core earnings more than doubled, nosing past analysts' estimates, amid strength in its chip and electronics components businesses.
The Amsterdam-based heavyweight, Europe's largest maker of lighting products and the region's no. 2 in semiconductors, said third-quarter income from continuing operations rose to  771 million ($651 million), or 58 euro cents a share, excluding one-time items, from 331 million, or 0.25 cents a share a year earlier.
That excluded 1.3 billion in exceptional gains, resulting from factors including the rising value of Philips's stakes in semiconductor firm Taiwan Semiconductor Manufacturing Corp. and the sale of some shares in JDS Uniphase (JDSU: Research, Estimates).
Taking those gains into account, net income rocketed to 2.07 billion ($1.75 billion), or 1.58 a share, during the quarter, from 374 million, or 28 euro cents per share, in the same period of 1999. Revenue jumped 21 percent to 9.37 billion.
Analyst Angela Dean of Morgan Stanley Dean Witter said the numbers were at the top end of the expected range.
"They were fine - there weren't any disasters, and in their semiconductor business came in better than expected," said Dean. "As far as tech goes, this is about as defensive a play as you can get."
Profit from operations in Philips's semiconductor business more than doubled to 373 million, while profit in the components segment exploded more than tenfold to 281 million. The lighting unit posted a slight drop in profit to 125 million.
However, Philips shares fell 4 percent in Amsterdam trading after the company said it expects its Philips Consumer Communications unit to sell 14 million GSM mobile handsets this year, lower than initially targeted. GSM stands for Global Standard for Mobile Telephones.
Chief Financial Officer Jan Hommen said the number would be lower than the 18 million handsets initially forecast because of a scarcity of components. In the first nine months, Philips sold 9 million handsets.
But Hommen also said sales at its semiconductor division are expected to grow in 2001 "slightly ahead" of the expected market average of 25 percent.
Semiconductor industry leader Intel Corp. (INTC: Research, Estimates), which recently announced a profit warning, is expected to report its latest quarterly results later Tuesday. Franco-Italian chip maker STMicroelectronics is set to publish its results on Wednesday. 
-- from staff and wire reports
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