Home Finance LG Display quarterly profit plunges as demand shrinks and prices slide

LG Display quarterly profit plunges as demand shrinks and prices slide

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A 77-inch LG Signature W OLED tv is displayed throughout the 2017 CES in Las Vegas, Nevada, U.S., January 5, 2017. REUTERS/Steve Marcus

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SEOUL, April 27 (Reuters) – LG Show Co Ltd (034220.KS) noticed first-quarter revenue plummet far under forecasts and warned of an additional drop in panel costs as pandemic-driven demand for TVs, smartphones and laptops fades and competitors heats up.

The South Korean Apple Inc (AAPL.O) provider stated it will shift its focus to higher-end merchandise and regularly decrease manufacturing of extra commoditised LCD TV panels the place it lacked a aggressive benefit over cheaper Chinese language rivals.

The LCD TV market shrank by greater than 10% within the first quarter and Chinese language rivals are pricing their merchandise decrease than LG Show’s expectations, Lee Tai-jong, head of the corporate’s massive show advertising and marketing division, stated on a name with analysts.

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First-quarter working revenue slid 93% to 38 billion gained ($30 million), undershooting a Refinitiv SmartEstimate of 182 billion gained and marking its lowest quarterly working revenue because the second quarter of 2020.

China’s COVID-19 lockdowns additionally triggered provide chain issues that affected panel manufacturing and shipments.

LG Show shares prolonged falls after the earnings had been introduced to shut 3.9% decrease, versus the broader market’s (.KS11) 1.1% decline.

“Margins have been squeezed mainly because of panel value declines and weaker demand, as customers have already purchased many screens throughout COVID-19 up to now two years,” stated Kim Yang-jae, an analyst at DAOL Funding & Securities.

Chinese language rival BOE Know-how Group Co Ltd (000725.SZ) has been tapped to additionally provide Apple with show screens, stated a supply with information of the matter.

The supply was not authorised to talk to media and declined to be recognized. LG Show declined to touch upon shopper issues. BOE and Apple didn’t reply instantly to requests for remark.

Within the first quarter, costs of 55-inch liquid crystal show (LCD) panels for TV units fell 16% from the earlier quarter whereas costs of LCD panels for notebooks and displays dropped by round 7% to 11%, in response to knowledge from TrendForce’s WitsView.

($1 = 1,263.0100 gained)

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Reporting by Joyce Lee and Heekyong Yang; Modifying by Jamie Freed

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