Royal Philips Electronics today lowered forecasts for full-year profits as it revealed an unexpected €265 million charge for asbestos liabilities had dragged third-quarter net profits below analyst estimates.

Net profits for the third quarter came in at €4.2 billion, up from €1.4 billion a year earlier. However, the figures were flattered by a one-off gain, also of €4.2 billion, from the sale of Philips's semiconductors business.

Analysts had expected a figure of around €260 million, excluding the semiconductors sale.

Sales increased by 1 per cent from the same period last year, to €6.3 billion, again short of analysts estimates for $6.5 billion.

Philips also lowered its predictions for full-year operating profits, to between 3.5 per cent and 4 per cent of sales. In July it warned that it may not meet a previous target of between 4 per cent and 4.5 per cent.

The sale of 80 per cent of the semiconductor business earlier this year to a consortium of private-equity firms for €6.4 billion marked the end of Philips as a vertically integrated electronics company, which made the basic components for its products.

The move was part of a major restructuring of Philips, which is now focused on its higher-margin lighting and hospital equipment divisions.

Philips today also confirmed a €4 billion share buyback plan, adding that it intends to buy €2.5 billion of its own stock before the end of the year.

Shares in the group fell nearly 3 per cent in morning deals in Amsterdam.

• Earlier today, Korea's Samsung unveiled a 16 per cent rise in third-quarter net profit to 2,190 billion won (£1.2bn). However, operating profits slumped 13 per cent to 1,850 billion won as margins fell in its memory chip, flat screen and mobile handset businesses.
  
  

Times Recommends

• PM to sue Icesave to get savers' money
• Former UBS lawyer pays $6.5m to settle probe
• Test case over non-dom told to pay UK taxes