LG.Philips LCD Co., the world's second-largest liquid crystal display manufacturer, said Tuesday it swung to a profit in the second quarter on cost reductions and strong panel prices.
For the third quarter, LG Philips painted an even rosier outlook, saying that it will post further gains as improving market conditions will likely favor of its panel business.
The company reported in a regulatory filing that its net profit reached 228 billion won ($248 million) during the April-June period, a turnaround from a loss of 322 billion won reported a
year earlier.
Sales jumped 44.9 percent to 3.35 trillion won. It also logged an operating profit of 150 billion won, compared with 372 billion won in operating loss a year earlier.
Analysts had expected the second-quarter bottom line to be around 26.3 billion won. Shares of LG.Philips LCD closed up 0.68 percent at 44,250 won on Seoul's main bourse.
The company attributed the improved business in the second quarter to successful cost reductions, strong display prices and increased demand for electronics items requiring flat panels.
"Our second quarter's performance was better than expected," LG.Philips CEO Kwon Young-soo said in a statement.
"This was driven in large part by successful efforts to cut costs, and to keep disciplined spending and healthy inventory levels," he added. "We benefited from more rational production and pricing levels in global markets."
Until the first quarter, LG.Philips had been struggling amid an industry-wide oversupply of flat screens and a strong local currency against the U.S. dollar, both of which put a drag on its export-driven business.
Bolstered by enhanced market conditions, LG.Philips, a joint venture between South Korea's LG Electronics Inc. and Royal Philips Electronics NV of the Netherlands, said that it expects its business to improve further in quarters to come.
Shares in LG.Philips, which released earnings results after the stock market closed, rose 0.7 percent Tuesday to 44,250 won ($48;euro35).