Tuesday, January 16, 2007

LG Philips Out of Options

LG.Philips LCD (NYSE:LPL) released disappointing results for Q4. Sales were up 11% but net income down approximately 50% from Q3 and comparable last Q4. Management was shuffled in Dec. (Always an excellent sign of disappointing results). New management is making promises about improvements but losses for two more quarters are widely accepted as inevitable.

Never mind about the existing products. The industry always travels the highway to hell by rapidly commoditizing anything they become involved in. LG has lost this round. It is time to move on to the next significant product or enhancement. What is in the lab? Not much. Therefore acquisition is the only way. The stock trades near its 52 week low. Q4 EBITDA is up 89% from Q3. Some are critical that they are not adequately investing. Cash and equivalents have doubled. Long-term debt is down 3%. The signs point to cash acquisitions. Short list candidates please report to

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