AMSTERDAM: Royal Philips Electronics NV, the largest consumer electronics firm in Europe, reported a 69 per cent drop in second quarter earnings and attributed it to poor performance at its liquid crystal displays joint venture. The company, however, said its sales and operating profit rose faster than expected.

Philips’ net profit dropped to 301 million euros from 983 million euros in the corresponding previous year quarter. However, sales rose 9.7 per cent to 7,6 billion euros from 6.93 billion euros. Operating profits increased in all the divisions, the company said.

The company maintained that it looks forward to an annual 5 per cent to 6 per cent growth in sales and an operating profit margin between 7 per cent and 10 per cent.

The joint venture between the company’s L.G. Philips LCD Co and South Korea’s LG Electronics reported a loss of 85 million euros against a profit of 822 million in the corresponding previous year quarter.

The company’s restructured semiconductor business showed an income of 120 million euros, rising from 27 million euros a year ago. This has been by far the biggest improvement. The company plans to either float the division or sell it off an independent business before the year-end.

Revenue at the medical systems unit climbed 9 per cent to 1.63 billion euros, while operating profit rose to 199 million euros from 157 million euros. Consumer electronics sales grew 10 per cent to 2.48 billion euros. Operating profit fell to 45 million euros from 62 million euros.

Chief executive Gerard Kleisterlee said in a statement that the company’s transformation into a market-driven healthcare, lifestyle and technology company has started to show its merits, with strong profit contributions from medical systems, lighting and domestic appliances,

The company is planning a new 1.5-billion-euro share buyback programme starting in the third quarter.