Dutch Philips Electronics

signaled a continued pick-up in the consumer electronics market, saying it expected fourth-quarter sales of about 2.8 billion euros ($4.1 billion) at its Consumer Lifestyle unit.

Europe's biggest consumer electronics producer, which hosts an analyst meeting on Wednesday, said it expects its television business to post at least a break-even result in 2010.

Although not a spectacular trading update, we feel that the tone of comments is clearly improving, with renewed focus on growth, while a number of earlier announced cost reduction programs start to pay off, Petercam analyst Eric de Graaf said.


shares were down 0.4 percent at 20.23 euros by 0854 GMT (3:54 a.m. EST), slightly underperforming a flat Amsterdam blue chip index <.AEX>.

Philips, which last year said it would not meet 2010 targets due to the recession, said it was now ideally positioned to benefit from high-single digit growth expected in consumer electronics and domestic appliances markets over coming years.

The company's comments echoed remarks from Europe's top electricals retailers Kesa Electrical , Metro and DSG International that market conditions were improving.

The press release confirms the improving revenue trend at Consumer Lifestyle and the benefits from the restructuring, SNS Securities analyst Victor Bareno said.

The unit, which makes products ranging from MP3 players and digital photo frames to water kettles, toasters and shavers, realized more than 200 million euros in cost savings in the past two years.

In the third quarter the unit accounted for about 35 percent of total group sales.

Philips said in October it had still not seen a recovery in most of its markets and the holidays shopping season would be a key test of whether shoppers' confidence has returned.

(Reporting by Harro ten Wolde; Editing by Dan Lalor and Rupert Winchester)

($1 = 0.6877 euro)