Philips to concentrate on its healthcare sector

Philips electronics preformed above analysts' expectations in the second quarter, thanks to its healthcare sector.

The Dutch electronics company reported a net profit of 45 million euros for the second quarter on Monday, down 94 percent from last year. The profit was higher than expected; Dow Jones' analysts had predicted a net loss.

Philips' turnover was down 19 percent to 5.2 billion euros. The most significant decline was in the consumer lifestyle business where turnover was down 30 percent from 2.7 billion last year to 1.7 million euros in the last quarter. Demand for TVs but also for video and audio equipment is down because of the recession, Philips said.

The lighting division suffered a 18 percent decrease in turnover, due to lower demand from the construction and automotive industries.

Healthcare, at the same time, was down only 5 percent. The healthcare sector now has a turnover of 1.9 million euros and Philips is doing most of its acquisitions in that area.

Philips had been shifting its attention away from consumer electronics to medical equipment - including wellness products geared towards consumers - and the downturn seems to boost that transition.

Philips second quarter results were down significantly compared to last year, but not as disastrous as in the first quarter when the company booked a net loss of 59 million euros. CEO Gerard Kleisterlee said Monday he "did not see a material improvement in consumer or professional markets in the past three months", but he was optimistic about the second half of 2009.

Philips scrapped 6,000 jobs at the end of last year to save 600 million euros in costs. Kleisterlee said more redundancies could follow. "We will do everything necessary to come out of this recession as a stronger, more agile company," the CEO said in a statement.