LG Display narrows Q3 losses, sees turnaround in Q4

LG Display Co. said on Wednesday it will likely turn a profit in the fourth quarter of this year, snapping its losing streak of the past six quarters, thanks to shipment growth for the year-end peak season and double-digit price increases compared to the third quarter.

“Panel inventory adjustments in the downstream industry are expected to run their course and shipments of panels for mid- to large-sized products and new mobile products are expected to pick up for the year-end peak season,” LG Display Chief Financial Officer Kim Sung-hyun said during a third-quarter conference call.

“We expect a turnaround in the fourth quarter.”

The South Korean company forecast its fourth-quarter shipments of TV and other electronics product panels to grow by the higher end of the 10% range on-quarter. Their average selling price is expected to rise to the mid-20% level.

In the July-September period, it sharply narrowed its operating loss to 662 billion won ($491 million) on a preliminary, consolidated basis.

That compares with a loss of 881 billion won in the second quarter and a 1.0 trillion won shortfall in the year-earlier period.

Its third-quarter sales were little changed at 4.8 trillion won on-quarter, but decreased by 29% from the year prior.

Its business efficiency improvement and cost-cutting efforts offset sluggish demand amid the economic slowdown and high inventory levels for customers in both the electronics goods and automotive sectors, it said.

LG Display swung to a loss in the second quarter of 2022, offsetting hefty profits reaped in 2021 but has narrowed losses since the second quarter of this year.

Its product mix remained steady, with OLED panels for laptops, PCs and tablets taking the biggest chunk of 40%, followed by TV panels with 23%.

OLED DISPLAYS

In the large organic light emitting diode (OLED) segment, LG will focus on ultra-large displays to target the premium TV market, while reducing material costs of key components.

In the small and medium-sized OLED market, it will bump up mobile display production.

For automotive displays, it is gearing up to mass-produce Tandem OLED and high-end liquid crystal displays (LCDs).

Tandem OLED refers to two-stack OLED technology, which adds an extra organic emitting layer to enhance screen brightness and lifespan.

LCD TV PANELS

On the other hand, it is scaling back LCD TV panels, regarded as lower-end and less profitable than other types of displays, despite a rebound in demand.

“Amid the US-China trade conflicts, customers want to diversify sourcing [of LCD panels beyond Chinese suppliers] to stabilize their supply chain management,” LG Display Chief Strategy Officer Kim Hee-yeon said during the conference call.

“There are increasing requests for supply to our company. But there is no change in our strategy related to the LCD TV [panel] business under our direction toward business structure advancement.”

Write to Il-Gue Kim at Black0419@hankyung.com
 


Yeonhee Kim edited this article.