Philips Electronics has blamed weak semiconductor sales and falling flat panel TV prices for a 79 per cent drop in quarterly net profits. The consumer electronics group posted earnings of €117m for the quarter ending 31 March, down from €550m for the same period a year ago.

The company's LCD business (LG Philips LCD) made a net loss of €34m, compared with a net profit of €215m a year ago. Income from the semiconductor business fell from €69m in 2004, to €14m this quarter.

The weakness of the dollar, and dollar related currencies, also had an effect the company said, as it reported flat sales of €6.64bn for the period.

Despite the rather dismal looking numbers, Philips' president and CEO, Gerard Kleisterlee, tried to remain upbeat. In a statement, he said that he was pleased with the progress being made in consumer electronics, but acknowledged that the "cyclicality [sic] of the technology sector had a negative impact" on the overall results.

Philips said it expected low-to-mid-single-digit sequential sales growth (in US dollar terms) in the next quarter. ®

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