Low Prices Push LG.Philips to 2Q loss

By Reuters Posted 11 July 2006 @ 09:08 pm EET     Print     Reprint     E-Mail     Comments

SEOUL (Reuters) - LG.Philips LCD Co., one of the world's top makers of liquid-crystal displays, reported Tuesday it swung to a loss in the second quarter as high inventories drove average selling prices sharply lower.

The Seoul, South Korea-based company said it lost 322 billion won ($340 million) in the three months ending June 30, compared with a profit of 41 billion won in the same period last year.

The result was slightly worse than expectations. A Dow Jones Newswires poll of nine analysts forecast the company to report a net loss of 319.5 billion won. Sales rose 0.3 percent to 2.32 trillion won ($2.49 billion), compared with analysts' forecast of 2.31 trillion won.

The company, which makes thin-film transistor liquid crystal displays used in flat screen televisions and computers, is a joint venture between LG Electronics Inc. and Philips Electronics NV of the Netherlands.

"We are disappointed with our financial performance in the second quarter of 2006," Ron Wirahadiraksa, the company's president and chief financial officer, said in a statement. "We are addressing an increase in inventory levels during a period of overcapacity, primarily in the LCD-TV segment, by temporizing production."

LG.Philips LCD, like other flat panel display makers in Asia, suffered from sharp price declines as sales of TVs using the technology during the World Cup soccer tournament failed to meet expectations.

Shares in LG.Philips rose 2.6 percent to 31,800 won. The company released earnings results after the stock market closed.