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LG.Philips LCD reports first-quarter loss on falling display prices

LG.Philips LCD reports first-quarter loss on falling display prices

LG. Philips LCD Co., the world's second-largest manufacturer of liquid crystal displays, said Tuesday it posted a first-quarter net loss amid a steep decline in prices.
LG.Philips lost 169 billion won (US$181 million; euro135 million) in the three months ended March 31, the company said in a statement. LG.Philips LCD posted net profit of 48 billion won a year earlier.
The loss was the fourth straight for the company, a joint venture between South Korea's LG Electronics Inc. and Royal Philips Electronics NV of the Netherlands.
Prices for LCDs, used in flat-panel TVs and computers, have steadily fallen amid technological and production advances as well as intense competition. Price declines, however, can moderate and prices can even rise during times of tight supply.
LG.Philips said that the average selling price per square meter of net display shipped, an industry benchmark, declined 34 percent compared to the first quarter last year, according to figures provided by the company. It declined about 9 percent from the previous quarter, LG.Philips said.
The company competes with South Korea's Samsung Electronics Co. for dominance in displays.
The loss was narrower than expected. The average estimate of nine analysts surveyed by Dow Jones Newswires forecast that the company would post a loss of 244 billion won (US$261 million; euro195 million).
Sales during the quarter rose 10 percent to 2.72 trillion won (US$2.9 billion; euro2.2 billion), better than the analysts' forecast of 2.54 trillion won (US$2.72 billion; euro2.03 billion).
Displays for flat screen televisions accounted for 45 percent of the company's revenue in the quarter, LG.Philips said.
"During the first quarter, our sales performance was encouraging, particularly in the TV and notebook PC segments, as the supply-demand environment improved and pricing began to stabilize," LG.Philips LCD CEO Kwon Young-soo said in a statement.
Shares in LG.Philips, which released earnings results after the stock market closed, fell 2 percent to 32,400 won US$35; euro26).
LG.Philips' Chief Financial Officer Ron Wirahadiraksa said he expects a "healthier market situation," among other factors, to help lead to a recovery.
"This will have a direct and positive impact on our sequential improvement in profitability," he said in the statement.


Updated : 2021-10-28 17:56 GMT+08:00