By Kim Yoo-chul
Staff Reporter
LG.Philips LCD, the world's second-largest liquid crystal display manufacturer, said Tuesday it swung to a profit in the third quarter of this year thanks to effective cost-cutting measures and strong panel prices.
Net profit amounted to 524 billion won ($570.4 million) during the three months ended Sept. 30, a major turnaround from a loss of 595 billion won a year earlier, the company said in a regulatory filing.
Sales jumped 42.6 percent to 3.95 trillion won and operating profit reached 693 billion won, compared with a loss of 382 billion won a year earlier.
The result met market expectations. Earlier, FN Guide, a leading online stock information provider, had predicted 517.7 billion won in net profit.
``We are pleased with the quarterly performance. The strong result reflects our focus on value-based management including our continued diligence on reducing costs,’’ Kwon Young-soo, CEO of LG.Philips LCD, said. ``We are well on our way to achieve this year’s guided cost reduction of about 30 percent.’’
LG.Philips LCD, a joint venture with Dutch company Philips, is expected to continue its strong and stable move in the fourth quarter, driven by soaring global demand.
``Beijing Olympics will fuel the ongoing soaring LCD demand,’’ said Chang In-whan, chief fund manager from KTB Asset Management.
``Signs of a slowing U.S. economy posed a threat to the LCD industry but such worries are marginal for now.’’
In a separate move, LG.Philips LCD said it will invest an additional 2.5 trillion won in constructing an eighth-generation facility for LCD panels.
``We are targeting a ramp-up of the production in the first half of 2009, believing this timing is in line with expected market demand of large-sized LCD TVs,’’ Kwon said.
However, the flat panel maker did not conceal possible worries over price fluctuations as LCD makers were expending investments in the eighth-generation line.
``We do not expect to get such excellent results in the fourth quarter as seen in the third quarter because of seasonal factors and expected price falls,’’ said John Kim, senior manager of the IR team.