Philips reports 11 percent rise in 3Q profit

However, shares in the Dutch industrial conglomerate fell sharply on worries its medical equipment division will not be insulated from worsening economic conditions, as investors had hoped.

Philips, which is world's largest lighting maker, reported net profit of 357 million euros ($484 million), up from 331 million euros in the same period a year earlier. Sales fell 2 percent to 6.47 billion euros ($8.77 billion).

The earnings included a one-time gain of 302 million euros ($409 million) from the sale of shares in Taiwan Semiconductor Manufacturing Co. offset in part by charges of 258 million euros ($350 million) for settling asbestos claims in the United States.

Philips competes with General Electric Co. and Siemens AG in the medical equipment market, and is also known for producing a range of consumer products such as shavers and flat-panel displays.

Chief Financial Officer Pierre-Jean Sivignon said some health care customers had begun putting off or canceling purchases in the final weeks of the third quarter.

"We saw a slowdown, almost a freeze in some product categories, in the orders," he said on a conference call with analysts.

"So clearly the psychology of the extremely volatile market conditions--I'm talking about the financial market conditions--in the later part of the third quarter, certainly had an impact on both revenue as well as the orders."

He said it was "largely a U.S. phenomenon" but the company was preparing for a global downturn.

Its shares fell 3.2 percent to 15.27 euros ($20.49) while the Dutch benchmark AEX index rebounded more than 10 percent after recent falls.