UPDATE 1-LG Display cuts Q4 outlook, reduces output further
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SEOUL, Dec 10 (Reuters) - LG Display Co Ltd (034220.KS) (LPL.N) slashed on Wednesday its sales and margin estimates for the current quarter and said it would reduce production further, adding to the spreading gloom in the technology sector.
Makers of liquid crystal display (LCD) are struggling with falling prices and weakening demand for flat-screen TVs and new monitors. A recovery is seen remote as analysts forecast weakness to persist at least through the first half next year.
The outlook is increasingly dismal for the entire technology industry amid the spreading global downturn. Electronics giant Sony Corp (6758.T) said on Tuesday it would cut 16,000 jobs, curb investment and pull out of businesses. Memory chip makers from Hynix Semiconductor Inc (000660.KS) to ProMOS (5387.TWO) are seeking fresh funding to stay afloat.
"Due to the global economic recession, demand for LCD panels has sharply declined and the price of LCD panels has dropped more than expected," LG Display said in a statement.
The world's second-biggest maker of LCD screens now expects average selling prices of its liquid crystal display (LCD) panels to fall by a low 20s percent in the fourth quarter from the third, compared with an earlier forecast of a high single digit fall.
Panel shipments were seen rising by a low single digit percent in the fourth quarter, down from the more than 10 percent rise seen earlier. And its margin on earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast at a low to mid teen percent versus the early 20 percent expected before, LG Display said.
Chief Financial Officer James Jeong said LG Display was stepping up production adjustments and expected its factories to run at about 80 percent of full capacity in the October-December quarter.
The company, which trails home rival Samsung Electronics Co Ltd (005930.KS) and ranks ahead of Taiwan's AU Optronics Corp (2409.TW), has cut production since late July.
LG Display shares ended up 0.43 percent at 23,500 won before the announcement, lagging the wider market's 3.62 percent gain. News that the company, along with Japan's Sharp Corp (6753.T), will plead guilty in mid-December in a U.S. price-fixing probe weighed on the stock. (Reporting by Rhee So-eui; additional reporting by Park Ju-min; Editing by Jonathan Hopfner)
