SAN FRANCISCO (AP) — Shares of companies that make LCD displays fell Tuesday after a Goldman Sachs analyst said demand in developed markets for LCD TVs is weaker than anticipated this year, though LCD panel makers could benefit in 2012 if they cut their capital spending.
Analyst Michael Bang cut his growth forecast for the year to 8 percent from 10 percent. This means he now expects 206.7 million LCD TVs to be shipped, rather than 210.5 million.
"We believe some panel makers have started cutting utilization rates, and low demand means a weak rebound in LCD prices, keeping them close to break-even for the panel makers in (the second half of 2011)," he said in a note to clients.
Still, Bang said low demand and resulting lower cash flow at LCD display makers will probably lead to lower capital expenditures in the second half of this year and throughout next year, that that would help narrow supply in the second half of 2012.
Bang lowered his rating on shares of LG Display Co. to "Neutral" from "Buy."
"Although LGD has introduced new 3-D TV products and has exposure to smartphone and tablet panels, lower TV panel utilization rates and weak LCD panel pricing appear difficult to offset," he said.
LG Display's American Depositary Shares fell 4 cents to $14.46 in mid-afternoon trading.
Bang also lowered his rating for AU Optronics Corp. to "Neutral" from "Buy," saying he now thinks the LCD industry could take more time to bounce back due to the lack of demand in developed markets.
American Depositary Shares of AU fell 49 cents, or 7 percent, to $6.43 in afternoon trading.
Elsewhere in the sector, shares of Corning Inc., the world's largest maker of LCD glass, dipped 20 cents to $18.34.
There are no comments yet