Seoul, South Korea — LG.Philips LCD reported higher sales but a loss for its first quarter, ended March 31, vs. its performance during the same time last year.
The TFT-LCD manufacturer said sales in the first quarter were $2.89 billion, up 10 percent from $2.62 billion in the previous year’s first quarter. Operating loss for the first quarter was $221 million compared with an operating profit of $55 million during last year’s first quarter.
Net loss in the first quarter of 2007 was $180 million compared with a net profit of $51 million in the first quarter of 2006.
Young Soo Kwon, CEO of LG.Philips LCD, 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. While we are pleased with these results, we continue to direct our resources on a number of key areas that we believe will bring about long-term shareholder value creation.”
He added, “First, our efforts to better collaborate with our customers continue to pay off, as exemplified by major customers ranking us among their top suppliers. Second, our continued focus on intensive cost reduction resulted in a sequential 9 percent decrease in cost of goods sold on a square-meter basis. Third, our finished-goods inventory levels came in at approximately two weeks at the end of the quarter. Lastly, our approach to CAPEX has made certain that investments specifically correspond with market demand.”
Kwon continued, “While the first quarter presented many of the same industry-wide challenges that have been affecting the company for the past several quarters, there are a few recent trends that are now positively impacting the industry: Consumers are demanding LCDs over plasma display panels due to superior technology at comparative pricing in the 40-inch TV segment, and the industry is taking a more conservative and realistic approach to production and capital spending. We expect that going forward these dynamics will bring further strength to the market and are indicative of an industry turnaround in the very near future.”
Ron Wirahadiraksa, chief financial officer of LG.Philips LCD, commented on second-quarter market conditions. “In TV segment we expect shipments to increase by a high twenties percentage with an average and ending ASP decline of a mid-single-digit percentage. In the IT segment, we anticipate shipments to increase by a low-teens percentage with an average ASP decline of a low-single-digit percentage and an ending ASP increase of a mid-single-digit percentage.”
He added, “Overall, we expect shipments in the second quarter of 2007 to increase by a high-teens percentage with an average ASP [retail price] decline of a mid-single-digit percentage and an ending ASP decline of a low-single-digit percentage.”
And Wirahadiraksa said that the company expects to “increase P7 input capacity to 110,000 input sheets per month in the third quarter, gearing us up for the anticipated demand increase in the second half of the year.”