Philips return to profit

Philips Electronics has said first quarter turnover increased by 2% to €6.631bn, as strong sales growth for chips and consumer electronics helped return the group to a profit.

In the three months operating profit improved to €218m, from €32m in the same quarter a year earlier.

Net profits were €550m, compared to a year-earlier loss of €69m, with a contribution of €457m in profit from associated companies.

Philips said it expects restructuring charges of €35m for consumer electronics in the second quarter.

The group said it expects to see €400m in cost savings at the division by end-2005.

Looking ahead to the second quarter, Philips forecast a one-time gain of $100m (€83.4m) from a licensing deal announced on Monday between InterTrust, a company Philips owns jointly with Sony Corp, and Microsoft.

Microsoft will pay $440m (€366.9m) for a license to InterTrust patents and to settle outstanding litigation between the companies.