South Korea’s LG Display on Wednesday reported a 30 percent drop in quarterly operating profit as a one-off cost related to profit-sharing plan and lower TV panel prices offset solid shipments of smaller screens for computers, laptops and smartphones.
The Apple supplier posted an operating profit of KRW 476 billion (roughly Rs. 2,975 crore) for the October-December quarter, down from 678 billion a year earlier.
It missed an average analyst forecast of KRW 588 billion (roughly Rs. 3,675 crore) compiled by Refinitiv SmartEstimate. LG Display said that excepting a year-end one-off cost involving sharing profits with executives and employees, its result was in line with market expectations.
Revenue rose 18 percent to KRW 8.8 trillion (roughly Rs. 55,020 crore).
During the quarter, prices of 55-inch liquid crystal display (LCD) panels for TV sets fell 37 percent from the previous quarter, market data from TrendForce’s WitsView showed.
However, only 27 percent of its sales came from television panels during the quarter, analysts noted.
Solid shipments of high-end LCD panels for notebooks and monitors, whose prices declined by less than LCD TV panel prices in 2021, as well as higher-margin OLED panels for smartphones and TVs, should support LG’s results this year, analysts said.
LG Display said its shipments of advanced organic light-emitting diode (OLED) panels jumped more than 70 percent in 2021 and the display maker reached break-even in its OLED business.
“The stay-at-home demand for notebooks, tablets and other devices is expected to gradually fall as COVID-19 lengthens and distancing rules ease,” said Kwon Jae-young, vice president and head of medium-small display marketing division.
“However, back-to-office and corporate demand from gradually improving economies is expected to increase, so overall demand for such devices in 2022 is expected to remain similar to 2021.”
LG Display shares ended down 0.7 percent versus the wider market’s 0.4 percent fall.
© Thomson Reuters 2022