LG Display's Q2 profit beats estimates as panel prices rise; shares up


FILE PHOTO: A man walks out of the headquarters of LG Display in Seoul, October 20, 2011. REUTERS/Jo Yong-Hak/File Photo

SEOUL (Reuters) - South Korea's LG Display Co Ltd on Wednesday posted a better-than-expected second-quarter profit as pandemic-led demand for TVs and laptops drove up panel prices, pushing its shares up as much as 4.2% in morning trade.

The display maker, whose customers include Apple Inc, reported an operating profit of 701 billion won ($607 million) in the April-June quarter, beating an average analyst forecast of 599 billion won from Refinitiv SmartEstimate. Revenue rose 31% on-year to 7 trillion won.

Prices of LG Display's mainstay 55-inch liquid crystal display (LCD) panels for TV sets more than doubled in the April-June quarter from the same period a year earlier, according to market data from TrendForce's WitsView.

Still, panel prices are slated to fall in the latter half of the year, as Chinese panel makers ramp up production on the back of a slight easing in the shortage of semiconductor parts, especially display driver integrated circuits (DDI), analysts said.

As well, vaccinated people around the world are venturing outdoors and watching less TV, prompting TV makers to take a conservative view on demand and lower panel procurement levels, analysts said.

"We are planning to operate our business on the assumption that IT panel prices might be partially mitigated and decline," Chief Financial Officer Suh Dong-hee told an earnings briefing, citing issues including competitors' panel production capacity and the parts supply situation.

Market demand for LCD TVs was likely to decline more quickly than for IT devices, which would likely lead to weaker panel prices for LCD TVs, Suh said.

Apple on Tuesday said a global chip shortage that has bit into its ability to sell Macs and iPads will start to affect iPhone production and forecast slowing revenue growth.

Analysts said the global chip supply crunch has pushed up prices of consumer electronic gadgets, including laptops, TVs and smartphones as manufacturers adjust prices to reflect component cost increases in their pricing, however, prices were unlikely to continue to rise as the chip shortage is expected to ease in the second half of the year.

LG Display's stock has risen more than a fifth so far this year, versus a 12.5% rise in the broader market. The stock was up 2.2% in late morning trade.

($1 = 1,154.2800 won)

(Reporting by Heekyong Yang and Joyce Lee; Editing by Richard Pullin)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

   

Next In Tech News

Flying-taxi hubs planned for 65 cities spanning London to LA
Banks beware, outsiders are cracking the code for finance
Bumpy road as ageing Japan bets on self-driving cars
Driving? Use Google Maps speed limit warning feature to stay safe; here’s how
Chip supply, testing woes to further curb light vehicle production in 2021- IHS Markit
El Salvador's bitcoin adoption has "immediate implications" for rating - S&P Global
Facebook cracks down on German anti-COVID restrictions group over 'social harm'
Facebook rolls out new messaging, business tools for brands
GM extends EV Bolt production halt to mid-October
Exclusive-Facebook cracks down on harmful real networks, using playbook against fakes

Stories You'll Enjoy


Vouchers