LG.Philips LCD Revenue Slides 6%
By Jeff Malester -- TWICE, 4/18/2005
Seoul, South Korea — Decreases in panel prices and the strong appreciation of the Korean won against the U.S. dollar set back first-quarter revenue at LG.Philips LCD by 6 percent.
Revenue hit $2 billion during the three months, down from $2.2 billion in the same period in 2004. The effect of the overall decrease in panel prices was partially offset by an increase in the volume of large and wide panels for notebook computers, desktop monitors and televisions.
LG.Philips, which is a supplier of TFT-LCD panels, reported a loss of $78 million in the first quarter, ended March 31, down from a net profit of $618 million in the first quarter of the previous year. The company cited “challenging market conditions,” due mainly to the strengthening of the Korean won and a “difficult pricing environment.”
The company also recorded a $133 million operating loss for the first three months, a stiff decline from the $688 million in operating income reported year-over-year. Earnings before interest, taxes, depreciation and amortization (EBITDA) dropped by 72 percent in the first quarter, down to $265 million from a year-earlier $961 million.
However, the company did note some positive emerging trends, mainly average LCD size increased due to the adoption of large and wide LCD monitors and the growing popularity of LCD TVs.
Overall, LG.Philips increased the size of its net display area shipped by 24 percent in the first quarter, compared with the previous quarter, but average selling price of net display area dropped 9 percent in the first quarter, compared with the end of the fourth quarter in 2004.
Along with the growing demand for LCD TVs, the company expects the industry's supply/demand balance to stabilize in the coming months.
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