South Korea LG- PHILPS LCD prices down provided margin expectations

Tuesday local time, South Korea LG- PHILPS lowered the company's first quarter of this year, LCD prices and shipments are expected, but due to the cost of production is reduced, the company also forecast the profit rate will be further improved.

Because of the strong demand for large screen flat-panel TV market, manufacturers have increased production capacity, investors are also worried that this will lead to price continued to decline, while profit margins will be further reduced. Manufacturers hope that before the opening of the world cup in June, the demand frenzy can eliminate the first quarter of the display and notebook panel seasonal sales weakness.

As the world's largest manufacturer of large LCD panels, LG- PHILPS said that compared with the fourth quarter of last year, the end of the first quarter of this year, the company's price decline is expected to be no more than 10%. Previously, the company had predicted its panel prices will fall by about 5%. At the same time, shipments will be slightly lower than the fourth quarter of last year, after LG- PHILPS had forecast shipments will grow by about $5%. LG- PHILPS president and chief financial officer Ron Wirahadiraksa said in a statement, "despite the strong demand for LCD TV market, other products seasonal weakness in sales is very serious, which will ultimately affect our overall shipments."

Referring to the latest LG- PHILPS production line, Wirahadiraksa said, because of the new plant P7 production, we raised the first quarter EBITDA profit margin is expected." He also said production costs have been cut more than previously expected. LG- PHILPS LCD production line in January this year to enter the stage of mass production, the world's second largest LCD panel manufacturers Samsung Electronics, the seventh generation LCD production line was put into operation in the month. LG- PHILPS is expected to release its first quarter results on April 11th.

News came, LG- PHILPS shares rose 0.59% to close at $42 thousand and 500.