Philips Misses Zacks Consensus

Royal Philips Electronics (PHG - Analyst Report) reported earnings of 27 cents per share for the third quarter of 2009, below the Zacks Consensus Estimate of 38 cents.

Sales amounted to $8.04 billion, a decline of 11% on both nominal and comparable bases.

Healthcare sales declined by 4% on a comparable basis due to declines at Clinical Care Systems, Imaging Systems and Healthcare Informatics.

Consumer Lifestyle sales fell by 15% on a comparable basis, due to declines in all businesses except Health & Wellness.

Lighting sales declined by 13% on a comparable basis, led by double-digit declines at Professional Luminaires, Lighting Electronics and Automotive Lighting.

In mature markets, double-digit declines at Lighting and Consumer Lifestyle were offset by a mid-single digit decline at Healthcare.

Sales in emerging markets showed sequential improvement although it remained 11% below the level achieved in the corresponding prior-year quarter.

The Group cash balance increased by €145 million to €3.7 billion, driven by free cash inflow of €353 million, partly offset by €172 million in payments for acquisitions. Operating activities generated cash inflow of €470 million compared to €210 million in the corresponding quarter of prior year.

Inventories as a percentage of sales rose by 70 basis points to 14% at the end of the quarter. Net debt at the end of the quarter amounted to €0.6 billion compared to €1.5 billion at the end of the prior-year quarter. Group equity remained stable at €13.4 billion.

Royal Philips Electronics, headquartered in the Netherlands, integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. Major competitors include Sony Corporation (SNE - Analyst Report), General Electric Company (GE - Analyst Report) and Panasonic Corporation (PC - Analyst Report).

We currently have a Neutral recommendation on PHG.