Its adjusted earnings before interest, taxes and amortisation (EBITA) for the three months ended Dec. 31, 2018 were 214 million euros ($244.75 million), compared with 207 million euros in the year-ago period. Sales dropped 8.8 percent to 1.73 billion euros from 1.89 billion euros.

Analysts polled for Reuters had forecast EBITA at 166 million euros and sales at 1.77 billion euros.

Signify, the former lighting division of Philips, was spun off as an independent company in 2016. CEO Eric Rondolat said the company would continues to navigate falling sales of traditional incandescent bulbs, as well as "challenging" conditions in other markets.

Sales of LED lamps made up 71 percent of company's revenues. Signify forecast a 2-5 percent growth in sales in 2019 for LEDs, along with professional lighting systems and home-networked lighting systems, which Signify sells under the Philips Hue brand.

However, traditional lamp sales will fall by more than 20 percent again in 2019, the company said in a statement. Sales of these lamps fell 20.1 percent in 2018.

"While market conditions are challenging, we continue to focus on new growth platforms," Rondolat said in the statement.

Signify maintained a target for 11-13 percent adjusted EBITA margin in 2019. For 2018 as a whole, that margin was 10.1 percent, at the bottom of a 10-12 percent range, but it was 12.4 percent in the fourth quarter amid a rolling cost-cutting programme.

"While volumes in LED lamps continued to grow, the business faced more challenging market conditions in some geographies, most notably China, and continued price erosion, although at a slower pace," Signify said.

It also cited weakness in China and Europe as contributing to a fall in sales and earnings in its professional lighting division, its most profitable.

(Reporting by Toby Sterling, Editing by Sherry Jacob-Phillips and Shreejay Sinha)

By Toby Sterling