Philips Lighting Q3 operating profit rises marginally
World’s largest lighting maker is winning larger, often high-profile contracts for networked lighting projects
A Philips lighting presentation. The company reported a marginal rise in third-quarter core profits on Thursday, meeting analysts’ estimates. Photograph: Hannibal Hanschke
Philips Lighting, the world’s largest lighting maker, reported a marginal rise in third-quarter core profits on Thursday, meeting analysts’ estimates. Sales fell by 3.5 per cent to €1.75 billion. Adjusted earnings before interest, taxes and amortisation (EBITA) were at €176 million, up from €175 million in the same period and exactly in line with analysts’ estimates. Net profit of €110 million s included a €21 million gain on the sale of real estate.
Sales and profits increased at all three of the company’s other, less profitable divisions - LED lights, professional lighting, and home networking, it said. CEO Eric Rondolat told reporters the quarter was noteworthy because for the first time growth in like-for-like sales at the three other divisions outweighed falling sales in the bulbs business.
He said investors could continue to expect small real estate gains as the traditional bulb business shrinks and Philips closes factories and opportunistically sells property. The company’s professional arm was the best performing division, increasing its operating profits by €27 million, despite weakness in the United States. Rondolat said US demand from the housing industry and small and medium businesses was continuing to lag. “Our customers are not making investment decisions as quickly as they used to,” he said. On the other hand, the company was winning larger, often high-profile contracts for networked lighting projects, he said.