Philips Electronics posted better than expected sales and profits for its third quarter, with all divisions except semiconductors managing year-on-year sales increases.
The Dutch company said Monday net profit in the three-month period ending September 30 increased by 12 percent, up to 1.44 billion euros ($1.73 billion) from 1.17 billion euros a year earlier.
Overall sales in the period increased 5 percent to 7.63 billion euros ($9.22 billion). However, operating income slumped to 442 million euros ($530.4 million), compared to 1.02 billion euros in the same period of 2004.
The largest single contributor to earnings was an extraordinary gain of 1.09 billion euros ($1.32 billion) in asset sales, including 635 million euros in nontaxable income from the initial public offering of shares in navigation systems company Navteq Corp.
Much of the money raised from selling off stakes in some operations is being reinvested to build up Philips? medical division and its lighting unit.
The company said the semiconductor business is at the bottom of its latest cycle, yet the group managed a quarter-on-quarter sales increase. Third quarter sales in the division rose 2 percent to 1.19 billion euros ($1.44 billion), with operating profit slipping to 90 million euros ($109 million) from 179 million euros ($216 million) a year earlier.
Philips said it expects fourth quarter semiconductor sales to rise about 7 percent in dollar terms from the previous period, similar to growth in the third quarter. Last month, Philips forecast fourth quarter semiconductor sales would gain about 5 percent in dollar terms from the previous three months.
Other extraordinary gains included the sale of stakes in Taiwan Semiconductor Manufacturing Co. Ltd. and flat-panel venture LG.Philips LCD.