Have Philips TVs Jumped the Shark?

Sagging TV sales, especially in the United States, dragged down first-quarter profits, as Royal Philips Electronics NV reported net income of 219 million euros ($347 million), nearly 20 percent lower than the 273 million euros analysts had forecast.

Net profit was down 75 percent from 875 million euros in same period last year a quarter boosted by a 733 million euro sale of a semiconductor manufacturer.

Chief Financial Officer Pierre-Jean Sivignon said there was stiff competition in the TV market.

"The U.S. remains the black spot, but when we look at the quarter it was tough all across," he said in a conference call.

Europe, where the Philips brand is much stronger than in North America, also lost money on TV sales, and is unlikely to show any profit for the rest of the year, he said.

As TV sales lag, Philips has taken aggressive action. Last week it announced a five-year licensing deal with Funai Electric Co. Ltd. of Japan to market the Philips brand in North America. Philips is taking a charge of 125 million euros to cover the cost of the transfer and other steps to boost TV sales.

Sivignon said Philips had no immediate plan to find a similar solution in Europe, but was keeping its options open. For the time being, it is focusing on cost efficiencies for TVs a product it has been developing since 1925.

This quarter included a gain of 83 million euros ($131 million) for the partial sale of LG Display, Philips said.

Shares fell 3 percent to close at 23.18 euros ($36.78).