Philips raises margin target as Q2 beats forecast

AMSTERDAM: Dutch electronics group Philips hiked its 2010 margin target on Monday after emerging market growth drove higher-than-expected sales and profit growth despite fears that a recovery was losing steam.

The company, whose products range from MP3 players and digital photo frames to MRI scanners, toasters and shavers, said it was confident it would exceed its 10 percent margin target this year on earnings before interest, taxes and amortisation (EBITA), excluding extraordinary items.

"Sales performance was especially strong in emerging markets," Chief Executive Gerard Kleisterlee said in a statement.

Second-quarter EBITA rose to 527 million euros ($684 million) from 118 million last year, on sales of 6.2 billion euros. Net profit came in at 262 million euros, above average analyst expectations.

It is the sixth time in a row that Philips' quarterly results beat average expectations.

Europe's biggest consumer electronics maker has aggressively cut costs even as a nascent economic recovery took hold, helping it to squeeze out earnings in a difficult environment.