LG Display, which supplies panels for Apple devices, reported profit that missed analyst estimates as weaker prices for TV panels outweighed increased sales of screens for new iPhone and iPad devices.
Net income, excluding minority interests, was 71.5 billion won (€49.2 million) in the quarter ended December 31st from 314.2 billion won a year earlier, the Seoul-based company said in a regulatory filing today. That missed the 159.9 billion won average of eight analyst estimates compiled by Bloomberg.
Lacklustre demand for televisions prompted panel price cuts as competition among Asian TV makers, including Samsung, LG Electronics and Sony intensified.
LG Display forecast first-quarter profit to fall from the previous quarter because of weak seasonal demand as shipments for new iPhones and iPads fail to make up for slower TV growth.
“The TV industry doesn’t seem to be structurally on the recovery path yet,” Hwang Joon Ho, a Seoul-based Daewoo Securities analyst, said before the earnings release. “Panel sales for mobile devices may stay solid this year, but that isn’t enough to offset declines at its TV business.”
Shares of LG Display fell 0.4 percent to close at 26,850 won in Seoul, while South Korea’s benchmark Kospi index declined 1.2 per cent.
Operating profit, or sales minus the cost of goods sold and administrative costs, was 257 billion won on sales of 7.08 trillion won.
“Looking ahead, we expect profits in the first quarter of 2014 to decline quarter-on-quarter due to traditional seasonal decline in panel shipments and price,” chief financial officer Don Kim said in a statement. “But we will do our utmost to overcome the challenges.”
Sales of mobile phone and tablet displays, accounted for 35 per cent of LG Display’s revenue in the fourth quarter, the company said in the statement. That compares with 25 per cent during the previous three-month period.
Apple shipped an estimated 55 million iPhones and 25 million iPads in the fourth quarter, according to a January 20th report from Mirae Asset Securities. The expected release of larger-screen iPhones and a series of sports events, including the winter Olympic games in Russia and the World Cup in Brazil, this year will drive display sales, said HMC Investment Securities in a January 16th report.
TV panels accounted for 37 per cent of LG Display’s sales, down from 44 per cent the previous quarter.
The world’s two top TV makers, Samsung and LG Electronics, are pushing ahead with a ultra high definition TVs with curved designs as they seek to revive shrinking global demand and stagnating prices. LG Electronics said at the CES exhibition in Las Vegas on January 6th that it will release 12 new TV models with ultra HD display technology this year. Separately, it announced a TV with a flexible screen using organic light emitting diode technology, joining Samsung in displaying sets that adjust viewing angles. (Bloomberg)
