* Q1 operating profit 94 bln won vs 51 bln analyst view
* Revenue falls 18 pct to 5.6 trln won
* Shares close down 0.7 pct vs benchmark's 0.2 pct fall
By Se Young Lee
SEOUL, April 22 LG Display Co Ltd,
the world's biggest maker of liquid crystal displays (LCD),
posted its weakest quarterly profit in two years after a
new-year demand lull further undercut TV panel prices.
The South Korean manufacturer earns well over a third of
revenue from TV displays but prices have been falling as LCD TVs
become widespread. To make up for the decline, the company has
been making more and more panels for mobile devices.
LG Display, whose primary mobile customer according to
analysts is iPhone maker Apple Inc, on Wednesday said
growth in smartphone screens in the first quarter weakened the
impact of falling TV panel sales.
For January-March, LG Display reported a 38 percent fall in
operating profit to 94 billion won ($91 million), the weakest
since the 211 billion won loss of the first quarter of 2012. The
result also compared with the 51 billion won mean profit
estimate of 34 analysts polled by Thomson Reuters I/B/E/S.
The average panel sale price fell to $628 a square meter
from $697 in the previous quarter, LG Display said in a
statement. Revenue fell 18 percent to 5.6 trillion won.
"The market is expected to show more stability towards the
second half of the year with a stabilization in panel prices and
a price increase for some products depending on the supply and
demand situation," Chief Finance Officer Don Kim said in the
Shares of LG Display have risen 14 percent since the start
of the year, compared with a 0.4 percent decline in the Korea
Composite Stock Price Index. Ahead of the results, they
closed 0.7 percent lower versus a 0.2 percent fall in the
The spread of LCD TVs in advanced economies and prevalence
for low-margin models in emerging markets makes for an uncertain
outlook for LG Display and rival panel producers such as Japan's
In the second quarter, LG Display expects panel shipments to
rise by slightly more than 10 percent from January-March, and
the average sales price to remain stable.
Analysts say TV panel prices are likely to improve in the
second quarter as sister company LG Electronics Inc
and other TV set makers launch large-screen products such as
ultra high-definition (UHD) televisions.
UHD TVs offer improved picture quality over previous
technology, but analysts say a dearth of content produced for
the standard may deter buyers.
"The picture quality on UHD TVs at department stores looks
fantastic, but when you buy one and take it home, there's
nothing to watch," said Daewoo Securities analyst Jonathan
A more substantial revenue boost is likely to come from the
release of Apple's new iPhone. The U.S. technology company is
widely believed to be preparing iPhones with larger 4.7-inch and
5.5-inch screens, though it may not both launch this year.
The new sizes could help Apple wrest market share back from
rivals such as Samsung Electronics Co Ltd, which
popularised larger screens on smartphones running Google Inc's
Android operating system.
Any boost in iPhone sales would push up earnings for LG
Display, which analysts say earns as much as 20 percent of
revenue by supplying parts for iPhones and other Apple products
such as desktop, laptop and tablet computers.
(Editing by Christopher Cushing)