LG.Philips LCD Co, the world's largest maker of liquid-crystal displays, posted a smaller-than-expected profit decline in the second quarter as an industry glut eased. The company forecast prices and shipments to rise in the current three months.
Net income fell 94 percent to 41 billion won (US$39 million) in the three months ended June 30 from 701 billion won a year earlier, Seoul-based LG.Philips said in a regulatory filing. Revenue, including overseas affiliates, rose 1 percent to 2.3 trillion won, the company said.
LG.Philips and other manufacturers of LCD panels are counting on demand before the new school year and the Christmas shopping season to help drive earnings growth in the US$35 billion industry. Screen prices probably rose for the first time in a year in the past quarter, indicating that the industry is starting to recover.
Second-quarter prices fell 1.1 percent from the first quarter and 42 percent from a year earlier, LG.Philips said.
Prices at the end of September will rise from the end of last month by a "single-digit" percentage, the company said. Third-quarter shipments will rise about 15 percent from the second quarter.
Excluding overseas affiliates, operating income fell 96 percent to 28 billion won and revenue dropped 11 percent to 2 trillion won, the company said in a separate filing.
The company plans to reduce capital spending next year to between 3.5 trillion won and 4.5 trillion won, compared with a budget for 4.6 trillion won for this year, according to the statement.
LG.Philips, jointly controlled by South Korea's LG Electronics Inc. and Royal Philips Electronics NV of the Netherlands, is the first LCD maker to report earnings for the latest quarter. The company had a 79 billion won loss in the three months ended March, its first quarterly loss in two years.
Suwon, South Korea-based Samsung Electronics Co, the second-largest maker of LCDs used in monitors and televisions after LG.Philips, reports earnings on Friday.
In Taiwan, AU Optronics Corp (友達光電), the world's third-largest producer, may report on Aug. 3 and No. 4 Chi Mei Optoelectronics Corp (奇美電子) on July 29, according to their Web sites.