LG Display posts first profit in more than a year
SEOUL, South Korea (AP) — LG Display Co. returned to profit for the first time in over a year as strong demand for the iPhone 5 and tablet computers increased sales of its display panels.
The South Korean company said Friday it earned 158 billion won ($144 million) in the July-September third quarter, turning around from a loss of 688 billion won a year earlier. It was its first quarterly profit since the April-June quarter of 2011.
The result fell short of analysts' forecasts, according to financial information provider FnGuide. Revenue totaled 7.6 trillion won, up 21 percent over a year earlier.
LG Display attributed its turnaround to growth in sales of high-end panels that are used in consumer electronics from TVs and notebook computers to mobile devices.
Analysts said the supplier of display panels for Apple's iPad and iPhone benefited from launches of Apple's new mobile products. Apple began sales of the iPhone 5 last month and earlier this week, it announced the iPad mini, a smaller version of the iPad.
LG Display has been in the red in recent years as the global economic slowdown reduced demand for TVs and panel prices tumbled due to oversupply. But the popularity of tablet PCs and other mobile devices is coming to the rescue of the panel industry. LG benefited from the trend. Some 24 percent of its panel shipments were for mobile phones and tablet PCs.
LG Display's third quarter operating profit of 253 billion won was its first operating profit in two years.
Research firm NPD DisplaySearch said global TV shipments are expected to decline by more than 4 percent in 2012 but LCD panel makers are expecting 8 percent growth in overall panel shipments. The growth will come from sales of panels for notebook PCs and tablet PCs, it said.
After a two-year slump in the panel industry, LCD TV panel prices are rebounding as panel makers slash output. About half of LG Display's sales come from supplying panels to TV makers, such as LG Electronics and Sony Corp.
LG Display is set to more than double its panel sales to Apple, analyst Yoo Jong-woo at Korea Investment & Securities said in a report. Yoo estimated 11 percent of LG Display's sales came from Apple during the first six months and 27 percent of its sales will be generated by Apple in the second half of this year.
In the fourth quarter, LG Display expects its profitability to improve as consumer electronics companies release new products to lure buyers during the winter holiday season when demand for consumer electronics products is traditionally strong.