AMSTERDAM – Consumer Electronics company Philips' first-quarter profits fell by 75% on lowering TV sales, mainly in the U.S. The company reported net income of $347 million, nearly 20% off what analysts had forecast.
Net profit was approximately $1.4 billion for the same period last year, when the company sold a percentage of its share in the Taiwan Semiconductor Manufacturing Company for $1.16 billion.
Pierre-Jean Sivignon commented on the strong competition in the TV market, stating that "The U.S. remains the black spot, but when we look at the quarter it was tough all across.”
Last week, the company announced it would stop making TVs for the North American market, where its sales were down 9% in the first quarter, and that it would license Funai Electric Company of Japan to market the Philips and Magnavox brands in the U.S. and Canada for five years. Industry reports say that the company will take steps to make its global supply base more efficient, and focus its TV business on stronger markets in Europe and other developing countries.
The company did show a gain of $131 million for the partial sale of LG Display, Philips said, and revenue losses were balanced by sales in the company's medical ultrasound and other imaging equipment segments, where sales grew 5 percent over the same quarter in 2007, and equipment orders increased by 9 percent, as reported by the company.