Net income probably climbed to 832.3 million euros (US$1.12 billion) from 160 million euros a year earlier, the median estimate of 10 analysts Bloomberg News surveyed by telephone and e-mail. Sales may have fallen 0.2 percent to 6.15 billion euros.

Philips Chief Executive Officer Gerard Kleisterlee last year sold most of the chip unit and part of its stake in Taiwan Semiconductor to focus on appliances, medical scanners and lamps. Amsterdam-based Philips forecast a "challenging" first quarter for its consumer electronics unit, the largest division by revenue, as prices of flat-panel televisions decline.

"Their change in strategy to dispose of cyclical businesses and invest in medical technology seems to be good," said Joost de Graaf, who helps manage about $467 million at Kempen Capital Management in Amsterdam and sold his Philips shares in February. "Now they have to show what the potential is of the businesses that are left."

Philips is scheduled to report first-quarter earnings on April 16 at 7 a.m. local time, followed by a 10 a.m. conference call hosted by Chief Financial Officer Pierre-Jean Sivignon.

Shares of Philips rose 6 cents, or 0.2 percent, to 29.34 euros as of 9:12 a.m. in Amsterdam. Before yesterday, the stock had gained 2 percent this year, trailing the 4.6 percent increase of the benchmark AEX index to which it belongs.

First-quarter earnings before interest, tax and amortization, or Ebita, probably rose 8.5 percent to 302.7 million euros, the median of six estimates in the survey.

Philips, the maker of DVD recorders and lamps used in Bayerische Motoren Werke AG cars, said on March 12 that first- quarter earnings would include a non-taxable gain of 725 million euros from reducing its stake in Taiwan Semiconductor to 12.8 percent from 16.2 percent. Taiwan Semiconductor is the world's biggest supplier of made-to-order chips.

Kleisterlee said on Jan. 22 he plans to exit the Taiwanese company completely because there's no longer a "business relation" with Philips after last year's sale of a majority stake in its chip unit.

The company's net income beat analyst estimates four times in the past five quarters. Of the 40 analysts covering Philips in the last year, 30 have a "buy" rating and three recommend selling the stock, according to data compiled by Bloomberg.

The consumer electronics unit may report an Ebita loss of 2 million euros in the period from a profit of 33 million euros a year earlier, Rabo Securities analysts Niels de Zwart and Frits de Vries wrote in an investor note. Sales at the unit probably fell 10 percent to 2.18 billion euros, the Rabo analysts said.

The analysts predict the unit will meet a 2007 target for profitability as they expect the market to recover in the second half of the year, helped by sales of new flat-TV models. They rate Philips shares "buy."

Philips, Europe's biggest maker of televisions, owns a third of LG.Philips LCD Co., the world's second-largest maker of liquid-crystal displays. The company has said it plans to reduce its holding in the panel maker.

LG.Philips LCD on April 10 posted its fourth consecutive quarterly loss as a glut drove down panel prices. The loss was smaller than analysts had estimated and the company forecast that demand for LCD televisions will lead to a shortage of panels in the second half.

Kleisterlee, 60, last month told reporters in Sao Paulo the company may have as much as 20 billion euros available to spend on acquisitions, dividends and stock buybacks in the next three years.

Philips spent more than 4 billion euros on purchases in the last two years to spur growth at the divisions that make appliances, medical scanners and lamps.

Philips is already in the middle of a plan to repurchase 4 billion euros of shares, of which it had 1.63 billion euros left at the end of 2006.

Kleisterlee received 2.54 million euros in base salary and bonuses for 2006, a 24 percent increase from the year earlier. The executive, who joined Philips in 1974, wasn't available for comment ahead of the report, spokesman Arent Jan Hesselink said.

Credit-default swaps-based on 10 million euros of Philips debt were unchanged at 26,000 euros, according to Deutsche Bank AG prices. Credit-default swaps are based on corporate bonds and are used to speculate on a company's ability to repay debt. An increase indicates a worsening in credit quality.

Standard & Poor's rates the company's debt A- and Moody's Investors Service rates Philips at A3.