Dutch consumer electronics giant Philips Electronics on Monday said it would divest its struggling television business as first-quarter net profit came in below expectations.

Philips is transferring its TV business to a joint venture with its partner, global monitor maker TPV.

Finding a solution for our television business was our top priority and we strongly believe that the intended 30 percent-70 percent 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, said chief executive Frans van Houten in a statement.

Van Houten, a restructuring expert, took over as chief executive on April 1.

Philips said TPV will purchase 70 percent of the shares in the joint venture for a deferred purchase price, equating to four times the joint venture's EBIT over the years 2012 until the year Philips exercises its right to receive the purchase price.

Philips also has an option to sell the remaining 30 percent stake to TPV for the same terms after six years.

Once a global leader, Philips TV business has lost its luster and cannot compete with lower-cost rivals.

The unit, which makes up less than 10 percent of group sales, has become a thorn in the firm's side, having notched up losses of almost a billion euros since the beginning of 2007.

Philips currently licenses its TVs to TPV in China as well as Funai in the United States and Videocom in India.

Philips announced first-quarter net profit of 138 million euros, down 31 percent from a year ago and below forecasts.

A Reuters poll had forecast quarterly net profit to fall 19.5 percent to 161 million euros.

Philips is the world's biggest lighting maker, a top three hospital equipment maker and Europe's biggest consumer electronics producer.

It competes with General Electric and Siemens in the hospital and lighting markets, and with Samsung and LG Electronics, among others in the TV business.

(Reporting by Roberta B. Cowan; Editing by Sara Webb)