Oct. 21 - Philips has reported better-than-expected third quarter results after orders from emerging markets rose 3 percent. But as Hayley Platt reports, the CEO of the Dutch healthcare, lighting and consumer appliance group remains cautious.
It's been around for more than a century, best known for its television and audio equipment. But Philips has been moving with the times and two years of cost cutting and restructuring is beginning to pay off. Net profits in the third-quarter of last year almost tripled to 281 million euros, beating expectations. Europe's largest electronics manufacturer has been reassessing its product range. It's sold off much of its consumer electronics business to focus on more profitable areas such as home appliances and medical equipment. But despite orders up 3 percent CEO Frans van Houten says there are several reasons to be cautious about the future. SOUNDBITE: Frans van Houten, CEO Philips, saying (English): "The turbulence in the United States market with regard to healthcare reform. We can also point to the currency movements across the world and Europe is still in economic crisis." Philips has cut jobs and operations over the past two years and invested heavily in high-tech systems. Despite the recovery Van Houghton says the outlook for healthcare remains tough, especially in the U.S. SOUNDBITE: Frans van Houten, CEO Philips, saying (English): "The healthcare reform leads to hospital CEOs being very very reluctant with capital expenditures. We see that hospitals are merging into a larger hospital systems and that means that the management there is focussed on consolidation rather than buying new equipment." Philips has been expanding into emerging markets such as China, India and Africa, where it's already reported double digit growth. It says it's on track to achieve its end of year targets. Its shares rose more than 6 percent after the results.