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Philips’ TV Loss May Be Anomaly

Jul 17, 2008  •  Post A Comment

Royal Philips Electronics’ second-quarter loss from television operations may turn out to be the exception rather than the rule for worldwide TV set makers.
The world’s No. 5 liquid-crystal display television maker, whose four larger competitors each will release earnings later this month, took a second-quarter loss on its television operations from restructuring charges as it prepared to outsource its TV sales in North America to cut operating losses. TV revenue rose on demand from emerging markets and the Euro 2008 soccer tournament.
The Dutch conglomerate had a TV operating loss of 112 million euros ($178.2 million)—about half of which stemmed from the restructuring charges—despite boosting sales 8% to 1.36 billion euros ($2.16 billion), Philips said this week.
But Philips, which said in April that it would outsource its North American TV production to Tokyo-based Funai Electric for at least five years starting in September, may be the only bearer of bad news among TV manufacturers.
Seoul-based LG Electronics, the No. 3 LCD maker, will report next week that its second-quarter profit more than doubled, largely due to surging television sales in Europe, Reuters reported this week. LG Display, the No. 2 LCD panel maker that’s 38% owned by LG Electronics, said last week that second-quarter earnings tripled from a year earlier.
Such results would be more consistent with NPD Group unit DisplaySearch’s projection last month that unit shipments of LCDs this year will jump 32% to about 105 million units.
Worldwide LCD leader Samsung reports earnings next week while No. 2 Sony and No. 4 Sharp will report the following week. The top five brands accounted for 62% of the worldwide LCDs sold in the first quarter and 68% of the LCD revenue, DisplaySearch said last month.

One Comment

  1. I know a person can’t judge a whole company by one dead television, but I really expect a TV to last longer than 8 years.

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