SEOUL, July 26 (Reuters) – South Korea’s LG Display (034220.KS) reported a fifth consecutive quarterly loss on Wednesday but forecast a return to profit in the last quarter of the current year, driven by an expansion of mobile panel shipments and other made-to-order business.
LG Display expects “a rise in demand for panels” as stockpiles of display panels have fallen during the first half of the year, CFO Sung-hyun Kim said.
“It appears that the market is now over the worst, but not yet starting a full recovery backed by actual demand,” Kim told an earnings call, adding that a turnaround was expected in the fourth quarter.
The Apple Inc (AAPL.O) supplier posted an 881 billion won ($689 million) operating loss for the April-June quarter versus a 488 billion won loss in the year-ago quarter, as weak seasonal demand for mobile display panels was compounded by sustained weakness in premium TV demand in its key market Europe.
The second-quarter result was in line with a forecast of an 889 billion won loss from 16 analysts polled by Refinitiv SmartEstimate, weighted toward analysts that are more consistently accurate. It had reduced losses from the first quarter’s 1.1 trillion won.
Revenue fell 15% from the year-earlier period to 4.7 trillion won.
LG Display shares fell 2.7% in afternoon trade, versus a 1.7% drop in the wider market (.KS11).
Factory run-rates for organic light-emitting diode (OLED) displays used in high-end televisions remained relatively low due to weak sales in Europe, resulting in the poor performance in the second quarter, analysts said.
The company has been running its OLED factory below full capacity due to a limited customer base and as a pandemic-driven demand surge for new TVs has tapered off.
However, panel sales to Apple are set to increase for the iPhone maker’s new smartphone launch later this year. Mobile display panel orders are concentrated in the second half of the year, ahead of the holiday season.
LG Display will start supplying high-end TV panels to Samsung Electronics (005930.KS), Reuters reported in May. However, the initial supply volume is unlikely to significantly impact the company’s financials in the third quarter, analysts said.
Reporting by Joyce Lee and Ju-min Park; Editing by Tom Hogue and Muralikumar Anantharaman
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