TPV Technology First-Half LCD TV Revenue Rises Despite Decline in Operating Profit

TPV Technology said its LCD TV-related first-half revenue soared to $1.8 billion from $866 million a year earlier. Shipments jumped to 6.3 million units from 3.4 million. LCD TVs accounted for 33.7 percent of TPV’s first-half sales, up from 28 percent, and represented 18.8 percent of shipments, an increase from 13.8 percent a year earlier, the company said. The improved revenue came despite a decline in first-half sales in North America, the company said.

TPV LCD TV group, which assembles sets at plants in China, Mexico and Poland, posted a $16.6 million first-half operating profit, down from $19.6 million, as gross margin slipped to 5 percent from 5.9 percent. The 32-inch screen size accounted for 28.3 percent of TPV’s first-half shipments, and 20- to 25-inch for 19.5 percent. TPV’s original design manufacture (ODM) business accounted for 87.7 percent of LCD TV revenue, and its own AOC brand for the rest. TPV, which assembles sets for Philips, Sony, Toshiba and others, also sells through RadioShack in the U.S. under the AOC brand.

TPV’s Q2 LCD TV average selling price rose to $300 from $267 a year earlier and $277 in the previous quarter, the company said, as it shipped more sizes 37-inch and up. TPV’s global 2010 LCD TV shipments are forecast to increase to 188 million units from 145 million, the company said. LED-backlit LCD TV were 10-15 percent of TPV’s first-half shipments and will exceed 50 percent in 2011, Corporate Finance Director Shane Tyau told us. The company is “technologically ready” to assemble 3D TVs but hasn’t shipped any models, he said.

TPV’s first-half TV business was driven by business in Europe, where sales rose to $1 billion from $253 million. The company said it benefited from production in Poland, where it assembled sets for Toshiba and others. Toshiba’s total LCD TV shipments were forecast to grow to 12 million to 13 million units this year, most to be assembled by Compal, TPV and Wistron, from 9 million, analysts have said. In North America, revenue slipped to $383 million from $413 million, company officials said.

"The U.S. market was slow in the first half,” Tyau said. “Although we managed to grow our shipments, its growth was much slower than Europe or China, resulting in a lower contribution to revenue."

TPV’s first-half China revenue increased to $162 million from $114 million. The China business is expected to benefit from a licensing agreement that the company recently signed to sell TVs under the Philips brand, sales of which will contribute to 2011 revenue, Tyau said.

TPV’s Q2 operating profit rose to $55.8 million from $47.4 million as sales, which including from PC monitors, jumped to $3 billion from $1.7 billion a year earlier. TPV’s Q2 gross profit slipped to 5.2 percent from 6.6 percent, the company said. North America accounted for 18.1 percent of TPV’s first-half revenue, down from 28.3 percent, though PC monitor/LCD TV shipments edged up to 6.1 million units from 5.9 million, the company said. Unit shipments in Europe rose to 8.2 million units from 4.2 million, and those in China to 12.3 million units from 9.8 million, the company said.

TPV’s global PC monitor revenue rose to $3.1 billion from $2.1 billion as the segment’s operating profit grew to $74.5 million from $46 million. Total first-half 2010 shipments increased to 26.4 million units from 20.8 million a year earlier. In North America, TPV’s PC monitor revenue increased to $570 million monitors from $464 million. Sales in China rose to $1.2 billion from $860 million. The PC monitor ASP increased to $119 from $104 a year ago and $117 in the previous quarter, the company said. Gross profit margin slipped to 6.3 percent from 5.7 percent. Original design manufacture ring was 74.1 percent of PC monitor sales, up from 72.5 percent a year earlier, while the AOC brand was 25.9 percent, down from 27.5 percent, the company said.