LG.Philips LCD Profits Fall as Flat Screen Prices Tumble
Oct 12, 2004
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A worse-than-expected drop in profits attributed to tumbling flat-screen prices hurt LG.Philips LCD Co.'s profits. The joint venture between LG Electronics and Philips Electronics N.V. experienced a 15-percent loss in third-quarter profits.
The company, said to be the world’s number two maker of liquid crystal displays (LCDs, said LCD prices dropped about 20 percent in the third quarter and would fall by another 19 to 32 percent by the end of the first half of 2005.
Consumers are not buying expensive LCD TVs in the volumes expected by flat-screen makers who have spent billions to ramp up production, leaving a surplus of displays on the market.
LG.Philips earned 291 billion won (approx. U.S. $253 million) in net profit for the third quarter ended Sept. 30, compared to 343 billion won (approx. 298 million) a year earlier. The company’s first earnings announcement since an initial public offering in July, fell short of analysts’ forecasts of 333 billion won (approx. $290 million).
LG.Philips and market leader Samsung Electronics Co. Ltd. have each committed to spend some (approx. $20 billion) on LCD factories over the next decade. Despite falling prices, LG.Philips said it did not have a problem with the current inventory level and doesn’t intend to adjust supply. (Reuters)
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