The company said the sale of its networked home lighting systems, a small but fast-growing part of its business, got a boost from the adoption of voice-activated home technology platforms such as Amazon Echo, Apple HomePod, and Google Home.

The company's adjusted earnings before interest and amortization (EBITA) rose 8 percent to 174 million euros ($202 million) in the quarter from a year earlier, on sales of 1.70 billion euros, down 2 percent.

Analysts polled by Reuters had estimated adjusted EBITA at 160 million euros.

Philips reiterated its full-year 2017 goals of a return to sales growth this year and a 50-100 point improvement in adjusted EBITA margin, which rose to 9.2 percent in the quarter from 9.1 percent in the year-earlier quarter.

Income from operations at the company's traditional lamps business fell to 98 million euros from 117 million euros, as sales fell 20 percent. The division, traditionally Philips' cash cow, no longer accounts for more than half of its income from operations.

Meanwhile, LED sales rose 23 percent to 246 million euros, but income from operations rose just 14 million euros to 41 million euros, due to price erosion.

The company's professional lighting arm, now its largest by sales, struggled, with sales down 2.3 percent and income from operations a loss of 1 million euros. The company said the U.S. market "continued to be soft, particularly for small-to-medium sized projects."

The company's home lighting division grew sales by 15 percent to 146 million euros, and income from operations swung to 9 million euros in profit from a loss of 33 million euros, helped in part by a 15 million euros gain on real estate.

(Reporting by Toby Sterling; Editing by Amrutha Gayathri)

By Toby Sterling