Thomson Joint-Venture TV Maker Reports Q1 Loss
By Jeff Malester -- TWICE, 5/2/2005
Hong Kong — An operating loss attributed, mainly, to the North American and European television business of its majority-owned joint venture, TTE Corp., was responsible for a first-quarter net loss of $6.2 million at TCL Multimedia Technology Holdings, compared with a net profit of $32.5 million in the year-ago three months. The company’s North American and European markets posted an operating loss of $31.5 million in the first quarter.
Sales from the North American market accounted for 21 percent of total TV sales at TCL. The company said competition was keener than ever in North America, driving selling prices downward. Despite the improvement seen in profit margins, driven by cost-control measures, the North American market still posted negative results.
TCL Multimedia is a consumer electronics manufacturer with a global sales network that does about 88 percent of its business in televisions. The business is operated under its 67 percent owned subsidiary, TTE Corp, the joint venture established with Paris-based Thomson in August 2004. The company’s televisions — marketed in North America, Europe and Asia — include the RCA, Thomson and TCL brands. Headquarters is in China.
TCL Multimedia sold over 5.1 million TV sets in the first quarter, up 60 percent from the first quarter of 2004, when 3.2 million units were sold. North America accounted for 653,000 TV sets sold in the first quarter of 2005, which was not comparable to 2004. Europe sold 606,000 TVs in the first three months, compared with a year-earlier 53,000.
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