Royal Philips Electronics NV (PHG) is expected to swing to a net loss when it releases third quarter results Monday on higher than expected restructuring costs and after last year's earnings were boosted by an asset sale.

The overall weak global economy has also hurt demand for the company's products, which include televisions, shavers, lighting and healthcare equipment.

The Dutch electronics maker is expected to post a EUR45 million net loss, compared with a EUR357 million net profit a year ago, according to eight analysts surveyed by Dow Jones Newswires.

Third quarter earnings last year were lifted by a gain of EUR302 million on the sale of the the company's final stake in Taiwanese chipmaker TSMC, but analysts also expect Philips' sales to fall 15.1% to EUR5.38 billion due to the sluggish economy in Europe and the U.S.

Still, emerging markets like Brazil and China will likely show some improvement, analsyts said. Philips recently set a goal to generate half of its revenue from emerging countries, up from less than a third now.

"Unknown is what the effect of product pruning at consumer lifestyle will be in the third quarter, but in the second period sales came in much lower than consensus estimates because of this effect," said Fortis Bank Netherlands analyst Rene Verhoef, who rates Philips at hold.

Lighting has benefited from increased car sales in many countries as a result of scrappage programs that stimulate the sale of new cars. Philips is the world's largest suppliers of lamps to the automotive industry, representing 7% of total lighting sales in the twelve months to June 2009.

Philips stated in July that the sector will start to benefit from a number of government stimulus programs. However, analysts note that lighting is still hurt by continuing weakness in the construction sector.

In its consumer lifestyle division, sales declines are expected to have moderated compared with the second quarter, said Deutsche Bank analyst Martin Wilkie.

"Improving commentary from consumer electronics peers and a pick up in U.S./European consumer confidence leads us to believe the worst declines in Consumer Lifestyle are now done," he said. Wilkie rates Philips at hold.

Philips' loss-making television manufacturing business, also part of the consumer lifestyle division, will be closely scrutinized as it contributes a large amount to overall sales at the unit. Last year, Philips abandoned the North American TV market, and has agreed a number of license deals with peers for the manufacture of Philips-branded TVs in other countries as it looks for ways to make the business profitable.

Meanwhile, cost savings at Philips' healthcare division have driven margins up, said UniCredit analyst Guenter Hollfelder. He expects a margin on earnings before interest, taxes and amortization, or EBITA, excluding restructuring costs, of 10%, up from 9.5% in the second quarter.

German peer Siemens AG (SI) recently noted that the outcome of U.S. healthcare reform will have a significant impact on that part of its business and warned that the market for imaging systems will remain difficult. Imaging systems, such as CT and MRI scanners, make up about a third of revenue at Philips' healthcare division.

Philips also competes with General Electric Co. (GE) in the medical imaging segment.

Restucturing costs, meanwhile, are expected to have exceeded Philips guidance of EUR145 million in the third quarter.

Philips isn't expected to provide any detailed guidance for the fourth quarter, but some analysts expect the company to reiterate that "comparative performance will be better in the second half of 2009 than in the first half of the year" due to the increasing impact of cost savings.

Philips may also raise its cost savings target for 2010 again, from the current goal of EUR600 million, analysts said.

Philips shares gained 35.6% in the last three months, outperfoming the AEX which gained 28.7% in the same period, as cyclicals outperformed defensive stocks and many analysts upgraded Philips' rating and target price. At 1130 GMT Friday Philips shares were up 0.3% at EUR17.11.

By Harm Luttikhedde; Dow Jones Newswires; +31-20-571-52-01; harm.luttikhedde@dowjones.com