LG Display reports 600% boost in fourth quarter operating profits

LG Display’s operating profits have left the forecast of 10 analysts in the dust. For its fourth quarter, Oct-Dec, the Apple supplier reported 279 billion won against its previous year of 44 billion won and against analysts’ forecast of 132 billion won.

On Wednesday, LG Display Co Ltd reported a rise of more than six-fold in its fourth-quarter operating profit from a year earlier, on the back of strong demand for its small panels including for smart watches.

LG Display, a supplier for Apple Inc, reported an operating profit for the October-December period at 279 billion won ($249.7 million) up from 44 billion won in the same period a year ago. Incidentally, this is above the 132 billion won forecast of 10 analysts based on I/B/E/S Refinitiv data.

Its revenues have however fallen by 2.5% to 6.9 trillion won.

LG Display has stated, it expects its panel shipments to fall by a high-single-digit percentage in the first quarter of 2019 and has attributed this to seasonally weak demand.

A slowdown in global handset sales is clouding the outlook for electronics makers and suppliers, including South Korea’s LG Display.

According to data from research provider TrendForce, the pices of 50” LCD TV panel have fallen by 7% during the fourth quarter after witnessing a slight rise in the previous quarter. Price drops are expected to continue into the first quarter with prices expected to stabilize starting from the second quarter, said WitsView, a data provider.

One bright spot in the fourth quarter was sales of small panels with higher prices, which helped drive operating profit growth in the fourth quarter despite weaker large-size panel prices, said WitsView.

“There was increasing demand for LG Display’s smaller liquid crystal display (LCD) panels especially for Apple Watches during the holiday-shopping season, giving them the chance to make up for the rather poor LCD panel sales performance for Apple’s struggling XR model,” said Lee Won-sik, an analyst at Shinyoung Securities.

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