UPDATE 1-TCL Multimedia sees losses at U.S., Europe ops

Fri Oct 8, 2010 1:56am EDT

* Says prices for 32-inch LCD panels down more than 25 pct (Adds details)

By Kelvin Soh

HUIZHOU, China Oct 8 (Reuters) - Chinese television maker TCL Multimedia Technology Holdings Ltd (1070.HK) expects its operations in the United States and Europe to incur losses in 2010, an executive said on Friday, adding that LCD panel prices are falling.

TCL, which makes televisions under various brands including Thomson, RCA and TCL, still gets about half of its revenue from old cathode-ray tube (CRT) technology and is trying to grow the flat-screen portion of the business.

"During the world cup we stored a lot me inventory expecting sales to jump, but that didn't happen and sales were not as good as expected," said TCL Chief Executive Hao Yi.

Hao said prices for 32-inch liquid crystal display panels had fallen by more than a quarter to $160, from $220 at the beginning of the year, and the company needed to act quickly to fend off competition.

"In the China market, when panel prices come down we must lower prices faster than our rivals," Hai said. "When prices go up we must (act) slower than our rivals."

TCL has had a difficult year so far, having revised downwards its LCD TV shipment target by one million to 8-8.5 million in August this year, hit by intensifying competition in its key China market from rivals such as Samsung Electronics Co Ltd (005930.KS).

Research firm DisplaySearch said the company was ranked third in China with a 15.8 percent market share of the LCD TV sector, behind rivals Hisense Electric Co Ltd (600060.SS) and Skyworth Digital Holdings Ltd (0751.HK).

China is expected to replace the United States as the world's biggest LCD TV market by the end of this year.

In March, TCL Multimedia sold new shares to raise HK$525 million to fund the development of its LCD and LED businesses in China and for working capital.

It returned to profit in 2009, but a survey of four analysts polled by Thomson Reuters I/B/E/S forecast the company to report a loss of HK$84.7 million this calendar year as it sold down its stock of old TV models and on the continued depreciation of the euro. (Editing by Chris Lewis)

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