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LG Display reports tiny profit

by on22 April 2013

Too much reliance on Apple

LG Display has reported its smallest profit thanks to the company’s dependence on the ever shrinking demand for iPhone and iPad screens.

Apple provides a third of LG Display's revenue and disappointing forecast by a US supplier to Apple last week heightened fears about slowing demand for the iPhone and iPad, pushing shares of Asian suppliers including LG Display sharply lower. LG Display made $135 million in operating profit in its January-March first quarter. It was the South Korean company's fourth straight quarterly profit after seven straight quarters of losses, as makers of liquid crystal display panels have since curtailed output after about two years of oversupply.

The result was also a sharp improvement from a loss a year earlier. But it was down 74 percent from the previous quarter, hurt by a seasonal slowdown in demand and by weaker sales to Apple. Sales of tablet and smartphone panels, which are largely bought by Apple, accounted for 27 percent of LG Display's total screen shipments in the first quarter, down from 31 percent in the fourth quarter.

LG Display said it expects panel shipments will rise by 5 percent to 10 percent in the second quarter from the previous quarter. Shares in LG Display have fallen about 3 percent in the year to date, compared with a roughly 5 percent drop in the benchmark KOSPI index. The stock closed 2.2 percent higher prior to the results announcement.

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