Thomson's digital boost

July 25, 2001 Posted: 0905 GMT

LONDON (CNN) -- Thomson Multimedia, the French consumer electronics company, said first-half net profits rose 32 percent, boosted by sales of digital products.

Thomson, which makes goods such as televisions, video recorders and flat panels for computers, said net profits for the six months to June 30 rose to 111 million ($97.1 million) from 84 million in the same period a year ago.

Operating profit rose 34 percent to 224 million from 167 million in the same six months of 2000, in line with expectations.

Revenues increased 16 percent to 4.71 billion from 4.06 billion last year, despite difficult market conditions in the U.S., where slowing sales of video recorders and TVs at the lower end of the market were partially offset by more demand for digital TVs and DVD players.

The company said it expected a difficult trading environment to continue in the U.S. and elsewhere for the rest of the year, and possibly into 2002. Thomson is the biggest seller of TVs in the U.S., where its brands include RCA.

Its first-half results included revenues from recent acquisitions, movie film processor and entertainment products maker Technicolor, Philips Broadcast, and from Thomson's Nextream joint venture with telecoms equipment maker Alcatel (PCGE).

The three businesses now form Thomson's digital media division, which makes and markets set-top boxes, digital TVs and other products, and contributed 689 million to revenues in the first half.

Thomson said, however, that Technicolor's financial performance was affected by the Hollywood Screen Actors Guild dispute.

Technicolor has evolved as the No. 1 processor of movie film to become the world's largest independent manufacturer of DVD-video, DVD-ROM, CD-ROM, CD audio and videocassettes.

Thomson's displays and components division was the worst performer, with sales slumping 7 percent to 714 million because of over-capacity in the U.S. market.

Thomson was partly privatised by the French government in 1999 and is still 38 percent-owned by the state.

Other shareholders include Alcatel and Microsoft (MSFT: Research, Estimates), with 6.4 percent each, Japanese electronics giant NEC, which holds 5.2 percent, and digital media provider DirecTV, with 4.9 percent.

Thomson (PHO) shares fell 2.2 percent in Paris to 34.75 after the results were announced.

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