South Korean LG Display more than tripled its third-quarter operating profit on Wednesday as strong television demand pushed panel prices higher but expects the pandemic-fueled spending spree to slow next year.
The Apple supplier posted an operating profit of KRW 529 billion (approximately Rs.3,390 billion) in the July-September quarter, compared to KRW 164 billion (approximately Rs.1,050 billion) a year earlier.
It missed an average analyst forecast of KRW 600 billion (approximately Rs.3,840 billion) compiled by Refinitiv SmartEstimate.
Sales rose 7.2 percent to KRW 7.2 trillion (approximately Rs.46,110 billion).
“Panel shipments in the fourth quarter are expected to increase by a median 10 percent compared to the third quarter, with delayed shipments being influenced by component shortages in the industry … while LCD TV panel prices are expected to remain on a downward trend,” said LG Display in a statement.
LG Display added that the strong demand for screens during the pandemic would likely slow down from next year.
“Panel makers like LG Display are enjoying strong demand for their panels for both televisions and IT devices, including monitors and laptops, as people spent extra time during the COVID shutdowns, but that demand is likely to wear off, because vaccinated people already spend less time doing it. ” in front of screens, “said Park Sung-soon, an analyst at Cape Investment & Securities.
The prices of the most important 55-inch LCD panels from LG Display for TVs rose in the third quarter by around 57 percent year-on-year, according to market data from WitsView from TrendForce.
The prices for these panels fell 7 percent in the third quarter compared to the second, according to WitsView.
The pace of growth has started to slow down, however, and could weaken further in the current quarter due to rising supply and weaker demand as more people get vaccinated and spend less time in front of screens, analysts said.
The shares of LG Display lost 0.3 percent compared to the benchmark KOSPI’s decline of 0.8 percent.
© Thomson Reuters 2021