Price war hits TPV earnings
TPV Technology, the world's largest computer monitor manufacturer, said its third-quarter net profit fell 7.7 per cent to US$38.4 million from the same period last year due to heavy finance costs and a price competition in the liquid crystal display (LCD) market.
Sales rose 49.2 per cent to US$1.95 billion, boosted by strong growth in flat television business.
Finance costs, including interest expense of the company's convertible bonds, doubled to US$9.3 million in the third quarter due to high interest rate.
According to the company's data, the average selling price of LCD monitors was about US$156.3 per unit during the third quarter, 25 per cent down from a year ago. Gross profit margin of LCD monitors was 4.8 per cent compared with 5.4 per cent a year earlier.
'There has been a general slowdown in both LCD monitor and flat TV growth momentum towards the end of the third quarter and this is expected to continue into the fourth quarter,' said the Taiwanese company. It declined to forecast the selling price.
'Our competitors want to drown us by a cut-throat price war but actually they cannot survive for a long time because the water has already risen to the level of their eyes,' said Jason Hsuan, TPV's chairman and chief executive. 'We will have better results in the second half of next year.'
Sales of LCD monitors, which accounted for 68.6 per cent of revenue, rose 54 per cent to US$3.56 billion for the year to September.
Revenue in the flat TV business, bought from Philips Electronics in June last year, rose 227 per cent to US$15.4 million from the same period last year, accounting for 15.4 per cent of total sales compared with 4.7 per cent a year ago.