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Companies cite low demand for LCD panels

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Saturday, October 30, 2010

Companies that make huge flat-screen televisions and their LCD panel components are alerting investors that demand is dropping in the United States and other developed markets.

The forecasts trickled out as Asian electronics manufacturers reported earnings for the most recent fiscal quarter.

On Thursday, Sharp of Japan slashed its earnings forecast for the fiscal year, which ends in March, saying it had to adjust its production of LCD panels in the most recent quarter to respond to a sharp decline in demand for the large-size panels.

Also Thursday, South Korea's LG Electronics said strong sales of LCD TVs, particularly in emerging markets, helped push its home entertainment segment revenue up 9 percent - but its operating income sank by about 52 percent. The company said it expects price erosion in its TV business will eat into earnings in the fourth quarter.

Sony of Japan reported Friday that LCD TV prices fell in the quarter that ended in September. The company cut its operating income forecast for the segment that sells the flat-screen televisions, citing deterioration in the North American market.

South Korea-based Samsung Electronics said Friday it also expects prices for LCD panels to decline.

That meshes with a recent report from iSuppli, which tracks shipments of LCD panels and flat-screen televisions.

The research group reported that the number of LCD panels for TVs shipped in the April-June quarter outstripped the number of TVs that were shipped; LCD panel buyers cut orders in July, iSuppli said, making the glut even worse and pushing prices for LCD TVs down in the early fall.

Associated Press

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