LG. Philips to Cut LCD Production

LCD maker LG. Philips has updated its Q2 outlook, anticipating slightly lower results on a number of fronts, and said it will slim its production to compensate.

In a statement released today, the Seoul, South Korea-based company said it expects area shipments to increase by a percentage in

"Several factors affected the global LCD industry during the second quarter,” said LG. Philips President and CFO Ron Wirahadiraksa in a statement. “First, the industry experienced larger than expected price declines across all product categories. In addition, while mid-to-long term demand for flat screen panels remains strong, we saw weaker seasonal demand during the second quarter, which has increased our inventory to about four weeks, a higher level than anticipated,

"Given these factors,” Wirahadiraksa continued, “we have decided to temporize production to address inventory concerns and better balance our short term supply with demand. Furthermore, we are reviewing our total capacity plans for the year and beyond."

LCD TV shipment growth at the end of Q2 is expected to be approximately 25 percent quarter-on-quarter, approximately 50 percent less than previously announced expectations.

By the end of Q2, the average selling price per square meter of glass is anticipated to decline by a mid-teen percentage quarter-end on quarter-end, compared to a "mid-to-high single digit" decrease guided previously, the company said.

The company's EBITDA margin is now expected to be around 10 percent, a decrease from the previous guidance of approximately 20 percent.

LG.Philips LCD expects to report its final Q2 results on Tuesday, July 11.