LG.Philips had a rough Q4 (ended Dec. 31) as LCD TV prices fell 33%, resulting in a loss of 174 billion won ($186 million), versus a 328b won profit in Q4'05. Sales were up 3.4% to 3.07 trillion won ($3.3b). Analysts surveyed by Bloomberg expected a loss of 158b won on revenue of 3.25t won. This is LG.Philips' third-straight quarterly loss and may not be its last since it said it expects to return to profitability by Q3. Its shares could face further downward pressure after falling 35% last year (it traded up 1% to 29,200 won before announcing earnings), the most among its largest rivals. It expects LCD TV prices to drop by a "low teens" percentage in the current quarter ending in March. Last Friday, rival Samsung reported a 24% decline in profit from LCDs due to falling prices. Leading plasma TV manufacturer Matsushita could emerge as a partner, replacing Philips, which has announced its intention to sell its 33% stake. In the meantime, LG.Philips continues to cut spending as losses grow, despite further investment by rivals. LG.Philips and other LCD makers face ongoing allegations of price fixing.
• Sources: Earnings press release, Bloomberg
• Related commentary: iSuppli: More LCD Pain On The Way, LCD Revenues Down in 2006 Despite Unit Sales Being Up 29%, LG.Philips Being Investigated in Three Countries for Anticompetitive Practices, More Red Ink for LG.Philips in Q3 on Flat Panel Weakness
• Potentially impacted stocks and ETFs: LG.Philips LCD (NYSE:LPL). Supplier: Corning (NYSE:GLW). Competitors: AU Optronics (NYSE:AUO), Matsushita Electric (NYSE:MC), Sharp (OTCPK:SHCAY), Sony (NYSE:SNE), Toshiba (OTCPK:TOSBF), Sanyo (OTC:SANYY)
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