SEOUL (Reuters) – South Korea’s LG Display Co Ltd said profit more than halved in the fourth quarter as soft demand for TVs continued to compress screen prices, outweighing a sales rebound in displays for Apple Inc’s iPhones.
LG Display, like competitor Samsung Electronics Co Ltd’s Samsung Display, has been pouring funds into next-generation technology to tempt consumers to upgrade from liquid-crystal display television sets.
LCD TVs quickly supplanted their boxy ancestors in advanced economies so sales have plateaued. Sales in emerging economies such as China are mainly of cheap models. As a result, the TV set industry is worth $96 billion from $120 billion in 2010, according to analysts.
That has made it difficult for LG Display and other panel makers to raise prices, crimping earnings as TV screens are a major source of revenue due to their large sizes.
Operating profit at LG Display, the world’s biggest LCD maker, fell 56 percent on year in October-December to 257 billion won ($241 million). That compared with a 238 billion won mean estimate of 31 analysts polled by Thomson Reuters I/B/E/S.
Shares of LG Display, worth $11.15 billion, closed down 0.4 percent ahead of the earnings release, compared with the benchmark index which was 1.2 percent lower.
“We expect profit in the first quarter of 2014 to decline quarter-on-quarter due to traditional seasonal decline in panel shipments and price,” LG Display Chief Financial Officer Don Kim said in a statement.
The company said it expects LCD shipments to fall around 10 percent to 15 percent in the first quarter, and that price declines may ease.
LG Display earned 37 percent of revenue from TV screens, down from 43 percent a year earlier. Revenue from smartphone and tablet screens rose to 35 percent from 31 percent.
In the year-end quarter, customer Apple sold a record 55 million iPhones during, up from 33.8 million iPhones sold in the previous quarter, according to analysts.
Last year, LG Display was on the receiving end of the yen-weakening policies of Japan’s prime minister, which made the panels of Sharp Corp and Japan Display Inc cheaper for international customers such as Apple.
LG supplied around 23 percent of iPhone screens in the third quarter compared with 57 percent in the second quarter of 2012, according to according to brokerage E*Trade Korea. Over the same period, Sharp’s supply jumped to 40 percent from 3 percent.
(Reporting by Miyoung Kim- Editing by Christopher Cushing)
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