TPV’s 2011 TV Shipments Fell Short of Forecast, Maker Says
TPV Technology shipped 12.7 million LCD TVs in 2011, short of its revised 15 million unit forecast, as “lackluster economic conditions” dampened demand for sets in developed countries, the company said. TPV lowered its projected 2011 TV shipments to 15 million units from 18 million in November (CED Nov 1 p3).
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While overall TV prices fell 10-20 percent in 2011, increased shipments of large-size sets and higher-priced LED backlit models enabled TPV to raise its average selling price (ASP) to $292.60, from $290.80 a year earlier, the company said. Despite the higher ASP, TPV’s TV business had a $56.8 million operating loss in 2011 as revenue fell 7.9 percent to $3.7 billion, the company said.
The TV shipment shortfall was partly tied to “excessive inventory levels” in 2011 in the U.S. and Europe early in the year coupled with a “sharp drop” in demand in Japan following the end there of a government sponsored Eco-Points program that spurred demand in 2009-2010, the company said. The Eco-Points program was introduced in Japan in May 2009, offering consumers subsidies for the purchase of eco-friendly home appliances. While manufacturers slashed panel production, prices fell by more than 10 percent before stabilizing in November, TPV said. Total global LCD TV shipments rose 7.1 percent from 2010 to 205.1 million units as an 11.1 percent decline in Western Europe and flat demand in the U.S. was offset by 17-40 percent growth in “developing regions” including China, Eastern Europe, Latin America and Asia-Pacific, TPV said. LCD TV shipments in “emerging economies” grew 24 percent from 2010, accounting for 55.1 percent of total deliveries, vs. 47.6 percent, TPV said. In developed markets, shipments declined 8.3 percent, the company said.
"TV panel prices fell more steeply as the result of insipid demand in the market particularly in the second half of the year,” TPV said. “While LCD TV segment grew, overall sales were well below industry expectations."
In 2011, 3DTV shipments jumped to 20 million units from 3.2 million the previous year, DisplaySearch said. With Chinese broadcasters expected to launch 3D channels this year, the technology’s share of total global TV shipments will increase to 23 percent from 12 percent in 2011. TPV said.
TPV expanded distribution on Philips brand TVs in China to 2,000 retail stores as it fielded models under a new 5-year licensing agreement, the company said. TPV grew ties with Philips last year in forging a joint venture to develop and sell Philips brand TVs globally with the exception of Canada, China, India, Mexico, the U.S. and some countries in South America, it said. The company plans to introduce its first SmartTV Internet-capable TVs this year that will feature content sharing and voice control, the company said. The new sets will build on a line that included 21:9 3DTVs last year.
TPV closed an assembly plant Suzhou, China, in December, cutting 1,000 jobs, but is building a facility in Qingdao, China, that’s expected to start producing sets for the Asian market this year. TPV had a $36.7 million gain on the sale of the Suzhou plant to the local government for $80.1 million, the company said. It also opened last June a new TV assembly factory in St. Petersburg, Russia, with annual capacity for 700,000 units, the company said. As of Dec. 31, TPV had annual manufacturing capacity for 32.2 million TVs, the company said.
TPV bought land near Shanghai for $44 million where it will build a headquarters for its branded business. TPV slashed its workforce to 29,516 in 2011 from 37,473 the previous year, the company said. Aside from closing the Suzhou factory, it wasn’t clear where the other jobs were cut. TPV officials didn’t comment.
TPV’s PC monitor business “bucked the trend caused by stagnant demand in the end market” to post a 4.7 percent increase in shipments in 2011 to 59.1 million units, the company said. TPV’s PC monitor ASP declined to $102.80 from $111.60 in 2010 as revenue fell to $6.1 billion from $6.3 billion, TPV said. LED backlit monitors will account for 70 percent of shipment this year, an increase from 45 percent last year, TPV said. TPV opened a new monitor assembly plant in September in Beihai, China, to supply the Southern China and other Asia-Pacific markets, the company said.
TPV’s overall profit in 2011 plunged to $110.6 million from $158.9 million a year earlier amid declining prices, as revenue fell to $11 billion from $11.6 billion, the company said. Sales in China fell to $3.23 billion from $3.58 billion, while those in North America slipped to $1.95 billion from $2.18 billion, the company said. In Europe, revenue fell to $2.88 billion from $3.65 billion, while sales in South America improved to $1.14 billion from $701.9 million, TPV said. Inventory dropped to $1 billion from $1.3 billion. TPV’s cash and cash equivalents stood at $303.3 million as of Dec. 31 from $184.4 million, the company said.