TCL shares fall after warning on earnings
Shares in TCL Corp, which owns the world's biggest television maker by unit sales, fell 4.1 per cent yesterday after its television unit said first-quarter net loss would be worse than expected due to higher restructuring cost in European operations.
The firm's Shenzhen-listed stock fell as much as 5.9 per cent to 4.60 yuan during the day before closing at 4.69 yuan. Shares in its Hong Kong-listed television unit, TCL Multimedia, fell 1.7 per cent to 58 HK cents.
TCL Multimedia, 39 per cent-owned by TCL Corp, warned its performance in the fourth quarter would be 'much worse than expected for the reasons that the overall costs and expenses, including impairment provisions, for restructuring and winding down our European operations far exceeded our previous estimation.'
The company, which will announce its fourth-quarter earnings on April 27, also said its business in the emerging markets was below expectation.
'Our operating performance was expected to improve gradually since a new business strategy and restructuring plan of the European business would be implemented progressively from the fourth quarter of 2006,' it added.
TCL Multimedia's chairman Li Dongsheng said last month the company would move from loss to profit this year as 'the turnaround has already started'.
In October last year, the company reported its net loss widened to HK$1.52 billion for the nine months to September due to a huge provision in its European operations, compared with HK$274 million from the same period in 2005. Sales fell 4.6 per cent to HK$21.4 billion in the period.