Koninklijke Philips Electronics (PHG), better known as Philips, on Monday reported a surprise second quarter profit, but said it sees only a moderate turnaround for the second half of the year.
The Amsterdam-based company reported a second quarter profit of 44 million euros, or $62 million, down 94% from 732 million euros in the same quarter last year.
On average, Wall Street analysts expected a net loss for the quarter of 125 million euros.
Philips, which produces a wide variety of items, including x-ray machines, televisions, and light bulbs, has been hurt by the economic recession, as consumers and businesses alike try to rein in spending. The company has combated the slowdown with cost-cutting measures that include laying off 6,000 employees.
Philips shares rose $1.20, or +6.6%, in afternoon trading Monday.
The Bottom Line
We have avoided shares of PHG since our early June coverage began last year, when the stock was trading at $37.16. The company has a 4.94% dividend yield, based on Friday's closing stock price of $37.16. The stock has technical support in the $14-15 price area. If the shares can firm up, we see overhead resistance around the $21 price levels. We would remain on the sidelines for now.
Koninklijke Philips Electronics (PHG) is not recommended at this time, holding a Dividend.com DARS Rating of 3.0 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
Tom Reese/Paul Rubillo, Dividend.com
