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The net profit of €9m (£5.5m as of 31 March) compares with a €93m (£57m) profit in the same period a year ago, when markets were still strong, Philips said in a statement Tuesday.
Philips for the first time reported its results according to US generally accepted accounting principles (US GAAP), which led it to no longer amortise goodwill. If it were to follow Dutch accounting principles, the company would have reported a €91m (£56m) net loss, compared with a €106m (£65m) profit in the same period a year ago, Philips chief financial officer Jan Hommen said in a conference call with reporters.
Sales in the quarter came to €7.6bn (£4.7bn), down 7% compared with a year ago. Philips Consumer Electronics, Components and Semiconductors divisions are largely responsible for this sales decline, although Semiconductors and Components have shown better sequential sales in the first quarter, Philips said.
"It looks like we reached the bottom of the cycle," Hommen said. "We can be optimistic for the second quarter, but I want to be a little guarded for what comes after that. I think we will see a modest overall recovery in sales this year."
Even though Philips is cautious with the outlook beyond the first half of the year, Hommen said the company expects to report a profit at the end of the year.