LG Display in red for 7th straight quarter after price-fixing
SEOUL (Reuters) - South Korea's LG Display, a major supplier of panels for the iPad and iPhone, spilt red ink for a seventh straight quarter on price-fixing charges although TV panel prices are showing signs of stabilizing and sales to Apple Inc are growing.
With the launch of a new iPhone expected later this year, LG Display is expected to swing to a profit in the third quarter, although a revenue miss from Apple has somewhat tempered optimism.
LG Display, which vies with Samsung Electronics Co's panel unit for the top position in LCD flat screens globally, had finally shaken off the ill effects of an industry oversupply in TV panels -- which account about half of its revenue -- when it agreed to pay $380 million to resolve price-fixing charges in the United States.
Its April-June operating loss was 26 billion won ($22.6 million), better than an average forecast for a 74 billion won loss, and below a 48 billion won loss a year ago and a 178 billion won loss in the preceding quarter.
LG Display said booked about $175 million worth of the price fixing charges in the quarter and expected earnings to improve in the third-quarter.
"On a pure operating income level, we had around 400 billion won of profit improvement in the second quarter from the previous quarter, although costs related to price-fixing led us to report another quarterly loss," Chief Financial Officer James Jeong told analysts.
The payment in a U.S. civil lawsuit over price fixing in the liquid crystal display market was the largest amount paid among the ten companies who similarly settled the litigation.
Analysts at CLSA estimate Apple currently accounts for about 16 percent of LG Display's revenue but this would rise to about 25 percent in the fourth quarter with the launch of the iPhone 5.
Increased revenue from Apple would help offset worries about slowing global demand for TVs.
Research firm NPD DisplaySearch has forecast the global LCD TV market will grow 5 percent this year, less than last year's 7 percent growth, due to uncertain global economic conditions, especially in Europe, where LG is estimated to earn more than one third of its TV panel revenue.
Prior to the announcement, shares of LG Display closed up 4 percent, outperforming a 0.7 percent gain in the wider market. ($1 = 1151.0000 Korean won)
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