Royal Philips Electronics NV, Europe's largest maker of televisions, raised its target for profitability, saying it had benefited from cost reductions and acquisitions.

Earnings before interest, tax and amortization of its current businesses will exceed 10 percent of sales by 2010, up from more than 7.5 percent this year, the company said. Operating earnings per share will more than double, Bloomberg News reported.

Cost savings of as much as 200 million euros (275 million U.S. dollars) annually will help Philips reach its profit goals, Chief Executive Officer Gerard Kleisterlee said. The Amsterdam-based company will reduce the number of divisions by combining consumer-related businesses and also by merging two health-care units.

"This is a statement of trust," said Pieter Wind, who helps manage the equivalent of 29 billion dollars, including Philips stock at ING Groep NV in Amsterdam. "This confirms the assumption that they're working very hard steering the company to more growth."

Philips shares rose 77 cents, or 2.7 percent, to 29.14 euros as of 10:27a.m. in Amsterdam. The stock earlier rose as much as 3.2 percent.

From Jan. 1, the company will have three main businesses: consumer lifestyle, health care and lighting. Philips will merge its consumer electronics, domestic appliances and personal care units into one division, consumer lifestyle. The health-care unit will be created through the combination of Philips' consumer health-care solutions and medical systems divisions.

The company won't fire employees as part of the restructuring, Kleisterlee told reporters.

From 2008 through 2010, Philips aims to achieve at least a six percent comparable annual average sales growth. Kleisterlee declined to give a forecast for earnings per share before interest, tax and amortization in 2007, saying it depends on the company's share buyback program.

The company may have net debt of "up to two times" those earnings by the end of 2009, Chief Financial Officer Pierre-Jean Sivignon said. The company will have an "efficient" balance sheet as it continues to pursue acquisitions and returns cash to its shareholders.

"This is very good - the targets are a very clear commitment," said Jan Willem Berghuis, an analyst.