Surprise, Surprise
We have written so often on the overcapacity in flat panel displays that our regular readers are sick of hearing about it. So today we’ll let others do the talking.
TheStreet.com on Applied Materials (AMAT - Annual Report):
Applied Materials’ profit surged 81% in its fiscal fourth quarter, but the results came up short of Wall Street expectations.
And in a subsequent conference the call with analysts, the world’s No. 1 vendor of chipmaking equipment said its fiscal 2007 year would get off to a slow start.
CFO George Davis singled out flat-panel-display manufacturing as the prime culprit for the slowdown.
Barron’s Tech Trader Daily on Circuit City (CC):
Circuit City has been holding meetings with the Street recently in which it is warning that average selling prices for flat-panel televisions are falling faster than the company had expected.
Associated Press on Wal-Mart (WMT - Annual Report):
“We are implementing our most aggressive pricing strategy ever across core categories, such as toys and electronics,” Scott said in a prerecorded phone message.
John Menzer, head of Wal-Mart U.S. stores, said there were “huge sales increases” among the discounted toys and in some electronics.
“We’re seeing a big growth in our new categories such as flat panel TV’s, MP3 players, laptops and cell phones.
MarketWatch on Home Depot (HD - Annual Report):
Home Depot Inc. on Tuesday said that it would be “opportunistic” in selling consumer electronics this holiday season, as it looks to drive sales during the critical shopping period.
On its third-quarter earnings conference call, the home-improvement retailer said that it planned to use its large-scale buying power to offer low prices on consumer electronics such as plasma and flat-screen television sets.
The only surprise in all this is why anyone would be surprised. From one end of the food chain (equipment manufacturers) to the other (retail) the story is all about too much capacity and faster than expected price reductions.
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