Philips reports positive quarterly and annual financials, touts lighting growth

Philips Lighting sales increased 4% overall, but Lumileds enjoyed more than 10% growth and LED-based product sales grew 43%.

Royal Philips Electronics, the parent of Philips Lighting, announced fourth-quarter and fiscal 2012 annual financials and said operational results improved by 50% even while Q4 charges hurt net income. The lighting sector was a positive one with overall sales increasing by 4%, with LED-based results doing even better.

Philips has a broad business base, of which lighting and LEDs are an increasingly important part. Philips reported double-digit growth for the Philips Lumileds division that makes LEDs. The company said that lighting sales in consumer luminaires and automotive had "mid-single-digit growth."

LED traction

The biggest lighting-centric news, however, was the growth of LED-based lighting both in absolute and relative terms. Philips said that LED-based sales grew by 43%. Moreover, LED-based products now make up 25% of Philips total lighting sales.

Overall, Philips said earnings in Europe totaled EUR 875 million ($1.19 billion) – 12.2% of sales. Net income was EUR 154 million ($209 million) and was impacted by a EUR 509 million ($690 million) European Commission fine.

"We are pleased with the continued improvement of our operational performance in the fourth quarter," said Frans van Houten, CEO of Royal Philips Electronics. "Through our Accelerate! program, we are making good progress in transforming Philips into an agile and entrepreneurial company, driving improved and sustainable results."

About future performance, van Houten added "The challenging economic environment in 2012, notably in Europe and United States, has impacted our order book, and hence we expect our sales in 2013 to start slow and pick up in the second half of the year. We remain confident in our ability to further improve our operational and financial performance, enabling us to achieve our 2013 financial targets."

Philips also announced that it was divesting its audio, video, multimedia, and accessories business. The company will transfer what it calls its Lifestyle Entertainment business to Funai Electric for cash and ongoing license fees.

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