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October 21, 2013 11:30 pm
Shares in Philips rose to their highest level since mid-2010 on Monday after Europe’s largest electronics company reported a near trebling of third-quarter earnings.
A strong performance in emerging markets, where the Dutch company focused on selling healthcare equipment and energy-efficient light products, lifted net profits from €105m a year ago to €281m.
Earnings before interest, taxes, amortisation and one-off items climbed 33 per cent to €634m, beating analysts’ forecasts, which averaged €567m.
“Our strategic focus on value-accretive innovations and new business models is resulting in encouraging successes across our markets,” Frans van Houten, chief executive of Philips, said in a statement.
The results lifted the group’s share price as much as 5.2 per cent, valuing the company at more than €24bn.
Philips has undergone restructuring over the past two years. Since the accession of Mr van Houten in 2011, the group has transformed itself by divesting audio-visual businesses to Asian competitors and refocusing on its healthcare, lighting and home appliance divisions.
Philips has set new targets for 2016 in earnings, return on invested capital and dividends. The group forecasts ebita to hit 12 to 14 per cent of sales, up from the 2013 target of 10 to 12 per cent.
Monday’s results, which coincided with the group’s €1.5bn share buyback announced in September, were in line with its new growth expectations, analysts said.
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