Philips, Europe's top electronics group, posted stronger-than-expected profits in the second quarter, but a huge charge related to its Vivendi Universal stake pushed it to a net loss.
The impairment charges knocked Philips to a net loss of €1.36 billion after a net loss of €770 million in the second quarter of 2001.
But excluding €1.561 billion in charges, Philips swung to a net profit of €171 million from a loss of €382 million.
The company said it expects a net profit this year, excluding impairment charges. It had previously said it expected a full-year net profit, but made no mention of excluding exceptionals.
Philips said it saw improvement in the second half in virtually all its sectors, but analysts said the outlook was somewhat lukewarm.
Philips shares rose but were off their highs, trading up 2.6 per cent to €23.81 at 8.48 a.m. slightly outperforming the pan-European Dow Jones STOXX technology index, which was up 2.3 per cent.
The company also said today that it had strengthened its policy on auditor independence, under which the firm will now rotate the lead external audit partner at least once every five years and key audit partners every seven years.