Philips sees improvement in profit for the second half with cost-cutting

AMSTERDAM (Reuters)-Philips said on Monday that it expects its operating profit climb in the second half of the year after cost-cutting measures, but stated that 2014 will still be a challenging year.
As a result of cost-cutting, the Dutch health care group, lighting and home appliances recorded earnings before interest, taxes and amortization (Ebita) of 415 million euros (562 million dollars) in the second quarter, and net profit of 243 million on sales of 5.3 billion.
Analysts predicted net quarterly profit of $ 164 million, Ebita of 400 million and sales of 5.4 billion, according to Reuters research.
"Despite the expectation be a 2014 challenging overall, we anticipate that the Group's Ebita, excluding restructuring costs, acquisitions and other items over in the second half of the year the level of the same period last year," said the company in a statement.
Philips is in the process of changing its profile of a consumer electronics product company to a company of high quality medical systems and lighting. Last month, the company announced plans to spin-off of its manufacturing business components for lighting to focus on delivering higher-value services and lighting.
(By Harro Ten Wolde and Thomas Escritt)