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LG Electronics Q2 earnings to pick up

Posted: 25 May 2007 ?? ?Print Version ?Bookmark and Share

Keywords:PDP market? LCD business? plasma screen?

South Korea's LG Electronics Inc. predicts a sharp improvement in Q2 earnings and possible signs of a turnaround in its plasma screen business within months.

This is according a Reuters report, which said that the company is suffering from a surplus of flat screens and posted into a worse-than-expected loss in Q1, stirring up speculations that it might sell the business.

The company recently said it would stop production of one of its three domestic PDP lines and was looking into strategic options for the business.

LG CEO Nam Yong, however, reiterated that the company will keep both plasma and LCD businesses to offer TVs in both standards. Nam added that there will be no change in the business strategy for PDP and LCD.

James Jeong, LG chief financial officer, said the plasma business's monthly EBITDA could breakeven between late Q2 and early Q3. Q1 results were not satisfactory, but Jeong was positive that earnings will improve in Q2. He added that displays will also show improvements in shipments, market share and earnings.

In addition, Nam disclosed that LG will retain its stake in LG.Philips LCD Co. Ltd, and partner Philips Electronics was not likely to sell off its entire stakes in the venture company. Philips announced plans to sell 32.9 percent, from the total 37.9 percent stake in LG.Philips over time, and a lock-up for most of the stake expires in July.

LG is forecast to earn $516 million in 2007, more than doubling last year's revised $228 million net profit, led by growth in mobile phones and appliances.

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