* Japan Display expects op loss in Q1, prices weak
* Sees pick up in U.S./Europe from Q2, China in H2
* Forecasts FY op profit 40 bln yen vs analysts' 57.38 bln
(Adds details of forecasts for loss in Q1, recovery later in
TOKYO, May 15 Japan Display Inc, the
world's biggest maker of liquid crystal displays for
smartphones, warned of a weak start to its business year and
forecast a net loss seen for the half-year to September, but
said rising orders from Chinese smartphone makers would fuel a
full-year profit rise.
The supplier of Apple Inc iPhone screens has been
hit by falling prices and delayed orders, contributing to its
shares dropping more than a third from their offering price
since they listed nearly two months ago.
"Ideally, we would offer goods at cost plus a certain margin,
but that's not possible. To become a global player we have to
decide how to lower costs based on the prices that customers
bring to us," Chief Executive Shuichi Otsuka told media at a
briefing after the results were announced.
It said a decline in revenue likely bottomed out in April,
however, while the first quarter was likely to fall into an
operating loss of more than 10 billion yen ($98.23 million).
The company said it expects a recovery from the second
quarter on a rebound in shipments to Europe and the U.S. where
client Apple, which it did not mention by name, is widely
expected to launch its next-generation iPhone 6 in September.
Media reports in Taiwan have said it could be released earlier
Japan Display aims to boost shipments to China in the second
half, when it is projecting a major improvement in operating
profit. For the full year, it expects China revenue to nearly
triple to 180 billion yen, or about one-fourth the total.
For the longer term, the company projected a steady shift to
higher-resolution screens, its speciality market where it
expects strong sales growth, particularly among Chinese brands
whose handsets are rapidly becoming more sophisticated.
Japan Display forecast a 45 percent rise in operating profit
for the 2014/15 business year to 40 billion yen, missing analyst
estimates in its first earnings release since its $3.3 billion
initial public offering in March.
The average expectation of 12 analysts was for operating
profit of 57.4 billion yen, according to Thomson Reuters
For the year ended on March 31, operating profit was 27.6
billion yen, meeting lowered guidance of 27.20 billion yen
announced on April 28, when the company said declining prices
had led to drawn out negotiations with clients and delayed
Shares of Japan Display ended 1.7 percent lower at 589 yen
ahead of the earnings release, slipping to a record closing low
for a fourth consecutive session and underperforming a 0.8
percent decline in the benchmark Nikkei average.
($1 = 101.8050 Japanese Yen)
(Reporting by Sophie Knight; Editing by Edmund Klamann and