Royal Philips Electronics reports Q4 net income more than doubled to €680 million ($881.9 million), or €0.59/share, from €332m, or €0.27/share last year, beating analysts' estimates of €396m to €400.6m, on revenue of €8.19b, which missed analysts' range of €8.32b to €8.34b. Philips was helped by a reduction in the Dutch corporate tax rate resulting in 90% lower income taxes and from a €240m tax on the partial sale of its stake in Taiwan Semiconductor Manuf. in the year-earlier period. Philips will boost its annual dividend for 2006 to €0.60/share from €0.44/share, its biggest dividend hike in 10 years, resulting in a 50% payout ratio with plans to maintain that level compared to its 25% to 35% historical payout rate. Philips attributed its sales decline to the sale of its semiconductor division to private equity. It also noted a challenging operating environment for flat screen TVs, which resulted in 6% lower sales for its consumer electronics division, although operating profit grew 11%. Philips expects annual average sales growth of 5% to 6% in '07 and EBITA as a percentage of sales of 7.5%, versus 5.1% in '06.
• Sources: Earnings report and presentation, Bloomberg, MarketWatch, Reuters
• Related commentary: LG.Philips Reports Big Q4 Loss Due to Falling LCD TV Prices, Philips Comments on Weak Flat Panel Sales and Its Consumer Electronics Business, Improving Q3 & Q4 Outlook for LCD Makers. Conference call transcripts: Philips Electronics Q3'06 [Oct. 16], LG.Philips LCD Q4'06 [Jan. 16]
• Potentially impacted stocks and ETFs: Koninklijke Philips Electronics (NYSE:PHG)
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