Come Monday morning, we'll get a fourth-quarter and full-year earnings report from Dutch electronics giant Koninklijke Philips (NYSE:PHG). This brief forecast should go down nicely with some Hollandaise sauce.

What analysts say:

  • Buy, sell, or waffle? According to a Reuters poll, 27 analysts rate Philips a buy today, nine are holding, and three want to sell, for a grand total of 39 firms with an opinion. It's a five-star stock in our Motley Fool CAPS database, though the current haul of 54 ratings is a bit thin. Have an opinion on Philips? Let us know.
  • Revenues. The analysts have settled on net income around 8.3 billion euro for this quarter, or $11 billion at the average euro-to-dollar rate of 1.32 over the last quarter. That's nearly 13% less than the year-ago period.
  • Earnings. A showing of 0.32 euro ($0.42) per share or ADR -- it's one share per depositary receipt -- would satisfy Wall Street. Philips pulled in 0.33 euro, or $0.44, of income per share from continuing operations last year, so expectations are largely a wash.

What management says:
In the third-quarter earnings report, Philips CFO Pierre-Jean Sivignon recounted a few items to take into account when forecasting this quarter. The medical division just acquiredIntermagnetics for $1.3 billion, resulting in a charge against earnings of 75 million euro in this quarter. Medical margins should improve regardless, and the consumer electronics operating margin should reach the customary "4%-4.5% target rather than the 3.5%-4%" of recent quarters.

What management does:
Steady as she goes ... whoops! What happened in the last quarter? Philips sold its semiconductor operations to a private equity consortium for a whopping $10.2 billion, boosting the bottom line but making returns on the newly inflated assets and equity look pretty bad.

Margins%

6/2005

9/2005

12/2005

3/2006

6/2006

9/2006

Gross

34.0%

33.6%

32.6%

32.4%

32.5%

31.6%

Operating

10.0%

10.1%

10.4%

10.3%

7.7%

2.6%

Net

9.6%

10.8%

9.4%

9.3%

6.9%

13.3%

Efficiency Ratios

6/2005

9/2005

12/2005

3/2006

6/2006

9/2006

ROA

5.8%

5.8%

6.1%

5.9%

4.6%

1.4%

ROE

19.2%

20.4%

18.7%

17.3%

12.9%

3.1%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Philips is rebuilding itself into a more focused and efficient operation, much like the eternal reshaping of General Electric (NYSE:GE). Consider that earnings are expected to come in flat despite much lower revenues, and you can see how much smoother the machinery will run. I looked into Philips a few years back, but lost interest because it was such a complex operation. A leaner, meaner company is emerging now, under an executive team that got a serious overhaul in 2006. I see good things from here on out, in high-growth markets like next-generation lighting and medical diagnostics.

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Fool contributor Anders Bylund is an AMD shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is good for what ails ya.