LG.Philips LCD swings to 3rd-quarter profit

Photo: LG.Philips LCD swings to 3rd-quarter profit

LG.Philips LCD swings to 3rd-quarter profit

The World’s second-largest manufacturer of liquid crystal displays LG.Philips LCD Co. announced Tuesday investment in a new facility to meet demand for larger-sized televisions and said it swung to a profit in the third-quarter.

LG.Philips LCD earned 524 billion won (US$571 million; EUR406 million) in the three months ended Sept. 30, the company said in a statement, after posting a net loss of 321 billion won a year earlier.

Sales during the quarter rose 43 percent to 3.95 trillion won (US$4.3 billion; EUR3.1 billion) from 2.77 trillion won a year earlier.

Separately, in a sign of confidence in future demand, the company said its board approved plans to invest 2.5 trillion won (US$2.7 billion; EUR1.9 billion) in a new manufacturing facility.

The so-called eighth-generation plant was expected to begin production in the first half of next year, Chief Executive Kwon Young-soo said in the statement.

"We believe this timing is in line with expected market demand of large-sized LCD-TVs," Kwon said.

The company had previously announced plans for the facility and had already constructed the building, but Tuesday's approved investment was the first to cover manufacturing equipment for it, LG.Philips said.

South Korean rival Samsung Electronics Co., in partnership with Japan's Sony Corp., in August began shipping large-sized panels of 46 inches and 52 inches at their joint eighth-generation LCD line south of Seoul.

Succeeding generation plants use larger glass substrates to cut LCD panels, thereby boosting output and eventually helping LCD makers cut manufacturing costs.

It was the second straight quarterly profit for the company, a joint venture between South Korea's LG Electronics Inc. and Royal Philips Electronics NV of the Netherlands. In the three months through June 30, it reported its first quarterly profit in more than a year.

The company, which competes with Samsung Electronics for dominance in displays, suffered four straight quarterly losses, mostly on falling prices for the products.

The average selling price per square meter of net display area shipped, an industry benchmark, rose 7 percent in the third quarter from the second, the company said. It decreased 4.6 percent, however, from the same period last year.

The average estimate of nine analysts surveyed by Dow Jones Newswires forecast that LG.Philips would post a net profit of 557 billion won (US$606.31 million; EUR432.34 million).

Shares in LG.Philips, which released earnings results after the stock market closed, fell 2.2 percent to close at 44,950 won US$49; EUR35). The company's share price has risen 61 percent this year.