UPDATE 3-Philips Q1 beats expectations, shares at 23-mnth high

* Q1 EBITA 504 mln euros vs 294 mln euros forecast

* Sees Q1 sales momentum continuing into Q2

* Shares up 2.3 pct, outperform market

(Adds CFO comment, graph, analyst comment, updates shares)

By Harro ten Wolde

AMSTERDAM, April 19 (BestGrowthStock) – Dutch Philips Electronics
(PHG.AS: )(PHG.N: ) on Monday reported first-quarter operating
profit above the most optimistic forecast, driven by its
lighting unit and cost cuts, sending shares to a 23-month high.

Philips, a bellwether for the technology sector, said on
Monday that earnings before interest, taxes and amortisation
(EBITA) rose to 504 million euros ($705 million) from a 74
million euro loss a year ago.

That was well above the average forecast of 294 million
euros and the top estimate of 383 million euros in a Reuters
poll of 19 analysts. [ID:nWEB0299]

Shares in Philips, the world’s biggest lighting maker and
Europe’s biggest consumer electronics producer, were up 2.3 pct
at 24.65 euros by 0928 GMT.

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For a related graphic please double click on:

http://link.reuters.com/hav38j

To view Reuters Insider interview with CFO Sivignon see:

http://link.reuters.com/fug28j

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They were one of the top gainers in the FTSEurofirst 300
index (.FTEU3: ) of leading European stocks and rose to 25.37
euros earlier, the highest level since May 2008.

“(These are) cast-iron results in their best-ever first
quarter in terms of profitability,” Theodoor Gilissen analyst
Jos Versteeg said.

Philips, whose products range from MP3 players and digital
photo frames to MRI scanners, toasters and shavers, competes
with the healthcare and lighting units of General Electric
(GE.N: ) and Germany’s Siemens (SIEGn.DE: ), among others.

On Friday, General Electric beat analysts’ expectations and
reported strong results at its healthcare unit. [ID:nN16249166]

H2 STILL UNCERTAIN

Philips said the outlook for the second half of the year
remained uncertain, even though first-quarter sales momentum was
expected to continue in the second quarter.

Chief Executive Gerard Kleisterlee said in a statement that
“economic uncertainty remains high and consumer confidence low”.

First-quarter revenue rose 12 percent to 5.7 billion euros,
while net profit was 201 million euros, up from a 57 million
euro loss in the same period last year.

SNS Securities analyst Victor Bareno said the results were
“stellar” and kept the shares on “buy”.

Philips said it was increasingly confident of delivering an
EBITA margin, excluding exceptional items, of 10 percent as
early as this year, nearing its original 10-11 percent margin
target, which was abandoned in 2008 due to the recession.
That outlook is based on the developments during the first
quarter as well as on its guidance for more than 700 million
euros in cost savings. “But we are always looking for more,”
Chief Financial Officer Pierre-Jean Sivignon said.

Sivignon told Reuters Insider that Philips had no intention
to up its almost 20 percent stake in Dutch chip producer NXP
[NXP.UL], which has filed a registration statement with the
Securities and Exchange Commission in the United States for a
potential initial public offering of its shares. [ID:nSGE63F0K3]

“We are still a passive investor (in NXP),” Sivignon said.
“We will see how that goes,” he said referring to the IPO, which
could raise up to $1.15 billion.

Philips said European sales growth was driven by its
lighting unit, largely due to restocking, and the healthcare
unit, while the North American consumer lifestyle business was
also a significant driver. In Philips’ emerging markets, such as
China, India, Brazil and Russia, lighting was the main driver of
double-digit growth.

Consumer Lifestyle Executive Andrea Ragnetti said he would
leave the company, ruling him out as a candidate to succeed CEO
Keisterlee, who will retire next year.

Philips has said it will make an announcement on
Kleisterlee’s replacement in the early second half of this year.

Stock Market Analysis

($1=.7153 Euro)
(Editing by Erica Billingham and Sharon Lindores)

UPDATE 3-Philips Q1 beats expectations, shares at 23-mnth high