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LG.Philips LCD Q2 Sales Slip 1%, Net Drops 94%

7/11/2005 10:54:00 AM Eastern

Seoul, South Korea — Although second quarter sales edged downward 1 percent at LG.Philips LCD, net income in the same three months plunged 94 percent, as TFT-LCD panel sales suffered from lower prices and an oversupply.

LG.Philips, second only to Samsung as the largest producer of flat-panel LCDs, reported sales of $2.2 billion in the second quarter, ended June 30, down slightly from the $2.3 billion recorded in the year-ago period. Second quarter sales were led by increased shipments of large and wide LCD televisions, desktop monitors and notebook panels.

LCD panels accounted for 53 percent of second quarter revenue, compared with 56 percent in the first quarter. Panels for desktop monitors accounted for 18 percent of sales in the second quarter, the same as the previous three months, while panels for notebook computers accounted for 24 percent of revenue, up from 22 percent in the previous period.

Net income in the second three months dropped to $40 million, down from $678 million in the same three months a year earlier, which came at the time of peaking prices and strong demand. Operating income was $28 million for the period, compared with the prior year’s $745 million.

“In the second quarter we experienced increased demand for monitor and LCD TV panels,” said Ron Wirahadiraksa, president/CFO of LG.Philips LCD. “TV panel shipments have benefited from LCD TV sets approaching more attractive ‘sweet-spot’ prices.

“We expect further progress on our cost-down efforts, especially for large and wide panels,” said the exec, while the “business environment [is expected] to continue strengthening in the second half of 2005.”

Overall, LG.Philips shipped 14 percent more net display area in the second quarter, compared with the first quarter, but the average selling priced declined 1.1 percent in the same time frame.

For the six months, revenue dropped to $4.1 billion, down from $4.3 billion in the year-ago period. The company reported a net loss of $35.8 million for the period, compared with a $1.3 billion profit in last year’s first six months. An operating loss of $99.7 million in the current first half, compares with an operating profit of $1.4 billion last year.

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