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UPDATE 1-LG Display Q2 profit misses estimate as stronger won weighs
July 23, 2014 / 6:55 AM / 3 years ago

UPDATE 1-LG Display Q2 profit misses estimate as stronger won weighs

(Adds comments from LG Display, background)

* Q2 operating profit down 55 percent on year

* Says Q3 revenue, profit to improve

* Apple launches, TV demand to boost H2 results -analysts

SEOUL, July 23 (Reuters) - LG Display Co Ltd on Wednesday said quarterly profit fell more than 50 percent for the second time in three quarters, pulled down by a stronger South Korean won and subdued demand for personal computers (PC) and tablet devices.

The world’s No.1 maker of liquid crystal displays (LCD) had forecast a pickup in panel shipments during April-June, while analysts were expecting stronger second-half earnings as TV demand in key markets improved.

LG Display, which counts affiliate LG Electronics Inc and Apple Inc as major customers, on Wednesday said shipments volume improved from a year earlier but that the average sales price of panels slipped further from January-March.

For April-June, LG Display reported a 55.4 percent fall in operating profit to 163 billion won ($159.23 million), compared with a 184 billion won mean estimate of 37 analysts polled by Thomson Reuters I/B/E/S. Revenue fell 9 percent on year to 6 trillion won.

“With seasonal demand growth and the trend toward larger size panels for TVs, we anticipate both revenues and profits to improve in the third quarter,” LG Display Chief Financial Officer Don Kim said in a statement following the earnings disclosure.

During the quarter, LG Display suffered from the strength of the local currency, which on average appreciated by more than 9 percent against the U.S. dollar in April-June from a year earlier. That marked the biggest percentage gain since the third quarter of 2011.

Subdued demand for key electronics products also weighed on results. PC shipments were flat in April-June, according to researcher Gartner, which was better than analysts had expected but still showed that a major pickup may be some way off.

Global tablet shipments in the first quarter also shrank in annual terms for the first time, researcher NPD DisplaySearch said earlier in July, suggesting weak panel demand for such devices.

Shares of LG Display closed down 2.7 percent ahead of the earnings release, compared with a flat benchmark index.

One analyst said the decline was exacerbated by concern of weaker revenue from major client Apple, which announced earnings on Tuesday.

“[Apple CEO] Tim Cook said during the (earnings) conference call that LCD prices fell in the June quarter and will likely slip further in the September quarter,” said Daewoo Securities analyst Hwang Joon-ho.

$1 = 1023.6500 Korean Won Reporting by Se Young Lee; Additional reporting by Lydia Lim; Editing by Christopher Cushing

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