LG.Philips LCD Co, the world's second-largest maker of liquid-crystal-display (LCD) panels, reported a fourth consecutive quarterly loss as a market glut drove down panel prices.
The net loss was 169 billion won (US$181 million) in the three months that ended March 31, compared with profit of 48 billion won a year earlier, Seoul-based LG.Philips said yesterday in a regulatory filing.
Consolidated first-quarter sales rose 10 percent to 2.72 trillion won.
The loss was smaller than analysts' estimates.
LG.Philips, which racked up a record loss last year in the US$70 billion LCD industry, forecast a shortage of panels in the second half as consumers replace conventional glass-tube sets with LCD televisions.
At least five brokerages, including Nomura Securities Ltd and Lehman Brothers Inc, raised their ratings on LG.Philips last month, citing increasing demand for LCD televisions.
"The first quarter was probably the bottom," said Park Hyung- ryul, who manages US$150 million at Consus Asset Management Co in Seoul.
"We'll see smaller losses in the current period and profit in the second half," he said.
The company forecast second-quarter earnings before interest, taxes, depreciation and amortization margin to be about a "low-twenties" percentage of sales.
Average prices during the second quarter will probably fall by a "mid-single digit" percentage from the first quarter, when prices declined 9 percent, the company said.
The company forecast demand for LCD TV panels will exceed supply throughout the second half of the year.
LG.Philips also expects a shortage of LCDs used in computers during the fourth quarter.
Kwon Young-soo, approved in February as the company's chief executive officer, is cutting costs and reining in production of LCD panels to offset price declines.
LG.Philips cut its investment plan for this year by almost two-thirds to 1.1 trillion won, while combined spending by the world's four-biggest LCD panel makers are forecast to decline 35 percent from last year, according to Credit Suisse Group estimates.
Reduced flat-panel production and higher demand for LCD TV may help ease an oversupply and stabilize panel prices, helping LG.Philips' earnings to recover, said Kim Hee-yeon, an analyst at Nomura Securities.
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