LG Philips LCD Posts Q2 Profit

Bolstering its stronghold in the thin-film-transistor liquid-crystal display market, Korea’s LG Philips LCD today reported a surge in sales for the quarter ended June 30.

Quarter-over-quarter sales increased by 12 percent, hitting $2.23 billion (2.3 trillion Korean won), compared with

Increased shipments of large and wide LCD TV panels, desktop monitor panels, and notebook panels led Q2 sales, according to the company. Industry analyst DisplaySearch reported LG Philips LCD garnered 24.2 percent market share of large panel revenue during the quarter.

“In the second quarter, we were encouraged by the growth in shipments of LCD TV panels and remain committed to executing our leadership strategy,” said Bon Joon Koo, vice chairman and CEO of LG Philips LCD, in a statement. He added that the company entered into a TFT-LCD panel supply agreement with HP during Q2.

Operating income in the second quarter swung to an operating profit of about $28 million, up from a Q1 loss of about $130 million and down from an operating profit of about $745 million in Q2 2004. EBITDA increased by 64 percent to $427 million quarter-over-quarter and decreased by 57 percent year-over-year. Net income shifted to a profit of $40 million from a Q1 loss of $76 million, compared with a net profit of $678 million in Q2 2004.   Overall, LG Philips LCD shipped a total of 1,096,000 square meters of net display area in the second quarter of 2005, a 14 percent sequential quarterly increase, with an average selling price per square meter of net display area of $2,062.

"In anticipation of [increased demand for monitor and LCD TV panels], we continued the successful ramp-up of our P6 facility," said Ron Wirahadiraksa, president and chief financial officer of LG Philips LCD.

"TV panel shipments have benefited from LCD TV sets approaching more attractive ‘sweet spot’ prices," he continued.

"We have already taken a leading position in this segment and we expect to further strengthen our market position in the second half of 2005 as demand grows...As our P6 facility approaches its design capacity in Q3, we also expect further progress on our cost down efforts, especially for large and wide panels," he added.

LG Philips LCD expects to finish strong in the second half of 2005.   For Q3, the company believes its area shipments will increase by a mid-teen percentage quarter-on-quarter due to continued growth in the monitor and TV segments.

Further, LG expects a single-digit percentage increase in average sales price per square meter of net display area shipped at the end of Q3 as compared to the end of Q2.

The company said it remains well positioned with the ramp-up of its P6 facility and the construction of its P7 facility.

CAPEX guidance for 2005 remains unchanged from the previous quarter’s guidance, the company concluded.