(Adds detail, company comment.)
By Robin van Daalen and Harm Luttikhedde
Of DOW JONES NEWSWIRES
AMSTERDAM -(Dow Jones)- Royal Philips Electronics NV (PHIA.AE) Monday posted an unexpected net profit for the third quarter as lower sales were partly offset by cost savings, lower restructuring charges and a gain, but its outlook remained cautious.
Net profit for the three months ended Sept. 30 was EUR174 million, up from a net profit of EUR57 million in the same period last year. Analysts had expected a net loss of EUR45 million.
The Amsterdam-based electronics giant also posted a better-than-expected 11% drop in sales during the quarter. Analysts had expected a 15.1% fall as the weak global economy hurts demand for the company's products, which include televisions, shavers, lighting and healthcare equipment.
Margins were lower on an annual basis for all businesses except consumer lifestyle, where earnings before interest and taxes rose to EUR126 million from EUR59 million a year ago as the restructuring of its television business led to a EUR50 million improvement in the segment.
However, margins at Philips' lighting division more than halved due to continuing weakness in many end-markets and restructuring charges.
"While encouraged by the positive developments in sales and profitability during the third quarter, we remain cautious about the short-term outlook in the absence of structural recovery in the majortity of our end markets," the company said.
Group earnings before interest, taxes and amortization, analysts' preferred measure of operating performance, came in at EUR237 million compared with a EUR133 million loss a year ago.
The figure includes EUR125 million in restructuring charges, offset by a EUR87 million gain due to the release of a provision for retiree medical benefits and a EUR30 million impairment reversal. Previously Philips said it expected around EUR145 million in restructuring costs.
Philips shares have gained 31% in the last three months, outperforming the AEX which gained 28% in the same period, as cyclicals outperformed defensive stocks and many analysts upgraded Philips' rating and target price. Friday, Philips shares closed at EUR17.04.
-By Robin van Daalen, Dow Jones Newswires; +31 20 571 52 01; robin.vandaalen@dowjones.com