Dutch electronics giant Philips has reported a fall in net income but a rise in nominal sales in the first quarter of the year.
The group said that net income fell from 199 million euros in the first quarter of last year to 138 million euros. Nominal sales however were up six per cent to 5.3 billion euros.
Philips said that solid growth at its Lighting and Healthcare divisions had led to a rise in comparable sales of four per cent. In its growth markets Philips' comparable sales were up eight per cent.
In addition to its first quarter results Philips said it was entering into a joint venture with TPV Technology, into which the group would be transferring its TV business. The new company will be owned 30 per cent by Philips and 70 per cent by TPV.
Frans van Houten, President and CEO of Royal Philips Electronics, said, "Finding a solution for our Television business was our top priority and we strongly believe that the intended 30% / 70% joint venture with TPV that was announced today will enable a return to profitability for the Television business, and an increased portfolio focus for Philips in health and well-being. Philips has been active in the TV industry for many decades and the long-term strategic partnership with TPV shows our commitment to the continuity of Philips televisions for our consumers and trade partners.
"The joint venture leverages the innovation and brand strength of Philips with the scale and manufacturing strength of TPV. Philips will receive a deferred purchase price and brand license income as part of the agreement. We expect certain costs in relation to the separation which will impact short-term earnings."
Mr van Houten also spoke about the impact of the recent disaster in Japan on the country, "We expect headwinds in 2011 due to the Japan tragedy, impacting our revenue and supply chain. We have a dedicated team working to mitigate the consequences and risks."