LG.Philips LCD Co, the world's largest maker of liquid crystal displays, said profit fell 22 percent, the fifth quarterly decline, as panel prices dropped. The company also expects prices to fall in the fourth quarter.
Net income was 227 billion won (US$218 million) in the three months ended Sept. 30, compared with 291 billion won a year earlier, Seoul-based LG.Philips said in a statement yesterday.
Sales, including overseas affiliates, rose 46 percent to 2.7 trillion won and operating income fell 6 percent to 240 billion won.
The company was projected to report net income of 218 billion won, operating profit of 267 billion won and sales of 2.7 trillion won, according to the median survey of 10 analysts surveyed by Bloomberg News.
LG.Philips, the first LCD maker to report earnings for the latest quarter, may increase concern about oversupply in the US$35 billion industry.
Makers of flat screens for televisions and computer monitors, which spent a record US$13 billion on plants and equipment last year, may face oversupply each quarter for at least three more years, according to the research company DisplaySearch.
Average prices by the end of the year will be "flat to slightly down" from the end of last month, LG.Philips said, without specifying a figure.
Average prices in the third quarter fell 26 percent from a year earlier and increased 2.9 percent from the second quarter to US$2,121 per square meter, the company said.
Fourth-quarter shipments will probably increase more than 10 percent from the third quarter, it said.
Third-quarter shipments rose 14 percent from the second quarter.
In July, when the company reported second-quarter results, LG.Philips forecast third-quarter shipments would rise by a "mid- teen" percentage from the preceding quarter, and average panel prices would increase by a "single-digit" percentage.
Average third-quarter prices of panels used in desktop computers, which account for more than half of demand, fell 21 percent from a year ago, according to estimates last month by researcher DisplaySearch.
LCD TV and notebook panel prices have also dropped, according to DisplaySearch.
Third-quarter LCD supply probably exceeded demand more than earlier anticipated as consumers bought fewer LCD TVs than expected and inventory rose, the El Segundo, California-based researcher ISuppli Corp said last month in a press release.
Still, price declines are slowing and the average price of desktop computer monitor panels, which account for more than half of LCD demand, has risen each month from the previous since April, according to DisplaySearch.
Prices climbing to US$186 last month, according to DisplaySearch.
Notebook panel prices have risen since June and TV panels climbed for a third month last month, the researcher said.
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