The Wall Street Journal-20080115-Business Technology- LG-Philips Net Soars on LCD Demand
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Business Technology: LG.Philips Net Soars on LCD Demand
SEOUL, South Korea -- LG.Philips LCD Co. reported its largest quarterly profit ever, predicted strong earnings for this year and said it may issue a dividend to shareholders, a rare step for a high- tech manufacturer with volatile earnings.
The company reported earnings of 760 billion won ($810.6 million) in the fourth quarter, compared with a year-earlier net loss of 174 billion won. Results were buoyed by demand for flat-panel TVs and other gadgets, which caught up with the industry's supply of screens, and by reduced costs.
For this year, LG.Philips executives said profit will be supported by solid demand for liquid-crystal displays, or LCDs, in TVs. In particular, the coming shift to digital broadcasting in the U.S. likely will boost sales.
In the last three months of 2007, LG.Philips's revenue was 4.32 trillion won, a 41% jump from 3.07 trillion a year earlier.
LG.Philips, the world's second-largest maker of LCDs by revenue after Samsung Electronics Co., lost money in 2006 as it and other manufacturers opened costly new factories. The company returned to profitability in the second quarter of last year, as the sales of products like cellphones, computers and TVs generated demand for screens that surpassed LCD makers' capacity.
With LG.Philips now sitting on a cash cushion of more than two trillion won, executives said they are considering paying shareholders dividends amounting to 30% of last year's net income.
Kwon Young-soo, chief executive officer, said in a statement that overall shipments as measured by area of glass are expected to increase by 30% in 2008.
The company's American depositary shares were up $1.62, or 7%, to $24.99 in 4 p.m. composite trading on the New York Stock Exchange.
