Cost Cuts Boost Profits at Phillips

In a remarkable turnaround for Phillips, the last three months of 2009 saw the electronics giant posting a profit of 251 million Euros. This is quite a comeback from 2008, when the management reported a loss of €1.2 billion.

This was a result of the cost cutting strategy put in place that resulted in the termination of 5474 jobs. However, it seems to paid off as despite decline in sales, with the fourth quarter sales falling by 3.4% to 7.3 billion Euros, the company reported high profits in all divisions .

According to chief executive Gerard Kleisterlee who welcomed the healthy figures, "Comparable sales came in at last year's level, delivering a record adjusted profitability of 12.3%. This reflects the successful manner in which we have been managing through the downturn".

Phillips is now targeting an earnings profitability of at least a 10 per cent in the coming year.