Dutch conglomerate Philips Electronics' reported a better than expected third-quarter operating profit on Monday as a result of cost reductions but the company remained cautious, seeing no recovery in many of its markets.
Earnings before interest, taxes and amortization (EBITA) jumped to 344 million euros ($507 million) from 57 million euros in the same quarter last year, beating the average forecast of 109 million euros given in a Reuters poll of analysts.
Individual forecasts ranged from 29 million euros to 176 million euros.
While encouraged by the positive development in sales and profitability during the third quarter, we remain cautious about the short-term outlook in the absence of structural recovery in the majority of our end-markets, the company said in a statement.
The remarks echo comments made by competitors General Electric and Siemens that underlying recovery had not yet begun.
The results look excellent, Petercam analyst Eric de Graaf said. There are more positive one-offs than expected, but even before these items the resultd look good.
He said cost cutting especially paid off in the consumer lifestyle unit, which makes products ranging from MP3 players and digital photo frames to water kettles, toasters and shavers.
The world's biggest lighting maker, in the top three for hospital equipment and Europe's biggest consumer electronics producer, Philips is in the process of cutting 6,000 jobs this year to cope with the recession.
It expects cost savings of 600 million euros next year.
EBITA at the consumer lifestyle unit rose to 129 million euros from 63 million last year, beating average analyst expectations of 38 million euros.
(Editing by Greg Mahlich)