Koninklijke Philips Electronics NV (PHG) Stock Continues to Grow Stronger

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Koninklijke Philips Electronics NV (NYSE:PHG) has shown tremendous market performance in the recent past, and there is sufficient evidence pointing toward a positive outlook for the company’s stock. Two of the factors contributing to the strong market performance of Philips are the commendable financial performance of the company, and timely mitigation of business risks. Philips recently announced strong numbers for the fourth quarter of 2012. The company also announced the sale of its audio and video business to Funai Electric Company, and a ten year collaboration with Sint Maartenskliniek. All these factors have had a very positive impact on the market performance of the company.
Koninklijke Philips Electronics NV (ADR) (PHG)Market Performance of Philips

Philips’ stock price that has had more ups than downs. Shares recently hit their 52 week high, and there is no reason to believe that this will decline in the near future. The company’s stock is currently being traded within the range of $30.88 and $31.33, and its 52 week range is between $17.16 and $31.33. The extent of incline in the share price can be deducted from the difference between the two extremes in the 52 week range of the company’s share price. The following chart represents the trend of the share price of the company over the past year.

It can be observed from the chart that the stock price has followed a fairly positive trend since it hit its 52 week low in June. There have not been any significant fluctuations in the share price and the upward trend has remained steady. From the market performance, the expectation regarding the continuation of the positive trend can be developed.

Financial Performance

Philips recently disclosed the financial information for the fourth quarter in 2012. The company reported a net loss of $460 million, which was $35.4% higher than the net loss in the same quarter last year. However, this decline does not influence the overall financial performance of the company because it was due to an anomalous payment of a fine amounting to $660 million to the European Commission. The fine was in regard to the violations of competition rules by Philips in 2001. If the impact of the fine is eliminated, the net income of the company amounts to $199.7 million. Thus, if there was no payment of fine in this period, the company’s loss would have shrunk completely. The strength of the company’s financial performance can also be evidenced by the growth in its revenue. The revenue growth for the fourth quarter was 3%, which amounts to $9.3 billion. In segment details, all the business segments of the company exhibited growth in revenues except the Innovation, Group, and Services division, which showed a 9% year-over-year decline in revenue. Thus, it can be said that the overall financial performance of the company has remained positive.

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