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LG Display expects return to profit after sixth straight quarterly loss

Published Oct 25, 2023 12:49AM ET Updated Oct 25, 2023 02:50AM ET
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© Reuters. People visit the LG display at the international consumer technology fair IFA in Berlin, Germany September 2, 2022. REUTERS/Lisi Niesner
 
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By Joyce Lee and Heekyong Yang

SEOUL (Reuters) -South Korean flatscreen maker LG Display (NYSE:LPL) on Wednesday flagged a return to profit in the current quarter, sending its shares surging, as weakness in premium TV sales drove it to report a sixth consecutive quarterly loss.

Demand for personal computers, TVs and mobile phones has been down on last year due to economic uncertainties and rising living costs, leading to device makers buying less components to make them.

However, stockpiles of display panels used in mobile phones have been falling throughout the year, leading to a likely rebound in demand, the Apple (NASDAQ:AAPL) supplier said.

"We expect to achieve a turnaround in profit in the fourth quarter as excessive panel inventory adjustments are eased in downstream industries," LG Display Chief Financial Officer Sung-hyun Kim said.

Panel shipments for mid- and large-sized organic light-emitting diode (OLED) displays and new mobile devices are also increasing to meet year-end seasonal demand, Kim added.

Mobile display panel orders are concentrated in the second half of the year, when panels for Apple's latest mobile products are produced before the holiday season.

Shares in LG Display rose as much as 8% after the earnings result, versus a 0.7% drop in the wider market.

"LG Display made it clear it will turn to profit. The market is recognising that there will be no further deterioration," said Jeff Kim, head of research at KB Securities said.

"We expect LG Display to supply small-to-midsized OLED for about 55 million devices this year, and about half will go out in the fourth quarter. Although iPhone 15 demand is a bit sluggish, LG Display only supplies high-end models, and the iPhone 15 Pro and Pro Max are seeing comparatively solid demand."

LG Display posted an operating loss of 662 billion won ($491.11 million) for the July-September quarter versus a loss of 759 billion won a year earlier.

The figure narrowed losses from the second quarter's 881 billion won.

Analysts said third-quarter losses were driven by continued sluggish demand for premium OLED TVs and shipping iPhone screens to Apple later than the market expected.

"There were some disruptions in production... but we overcame them. We expanded some of our production capacity in the fourth quarter, and we will try to... finish supplying as smoothly as possible," CFO Kim said in an earnings call.

($1=1,347.9600 won)

LG Display expects return to profit after sixth straight quarterly loss
 

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