* LCD panel shipments to slide about 15 pct this quarter
* LG Display says some customers cutting orders
* Worries about slower demand for Apple products growing
* Q4 operating profit 587 bln won vs 441 bln won f'cast
* Shares end down 1.2 pct prior to results
By Miyoung Kim
SEOUL, Jan 24 LG Display Co Ltd, a
major supplier of iPad and iPhone screens, said its LCD panel
shipments would slide this quarter, underscoring worries about
weaker growth for Apple Inc products, and taking the
shine off forecast-trouncing results.
Fears that demand for the iPhone and the iPad could be
slowing have been triggered by news of possible production
cutbacks by some component suppliers in Asia and were
exacerbated after Apple reported weaker-than-expected iPhone
sales in its quarterly earnings.
The South Korean company said some clients were cutting
orders and it expect LCD panel shipments to decline by around 15
percent in the first quarter from the previous quarter.
It provides about 70 percent of iPad screens, according to
research firm DisplaySearch.
"Some customers are adjusting their inventory and that will
affect our panel shipments," Chief Financial Officer James Jeong
told an analyst briefing.
"Along with overall weakness in demand due to a seasonal
slowdown, we expect our panel shipments will decline by more
than 10 percent and reduce first-quarter earnings."
Sales of tablet and smartphone panels, which are largely
bought by Apple, accounted for 31 percent of LG Display's total
screen shipments in the fourth quarter. Jeong said that will
fall to around 25 percent in the first quarter but added that it
will rise back to about 30 percent for the whole year.
A source close to LG Display also played down the risk of a
very sharp decline.
"Market concerns that (Apple) orders will tumble
dramatically are somewhat overdone," said the source, referring
to a CLSA forecast this week that LG's iPad panel shipments
could fall six-fold to 2 million in the current quarter. He
declined to be identified as he is not allowed talk about Apple.
"As Apple results showed today, iPad demand is much
stronger than many had worried about and that'll be reflected in
suppliers' first-quarter results."
Hit by growing worries about demand for Apple products, LG
Display's shares have lost about 17 percent since December after
gaining 40 percent in the first 11 months of 2012. Prior to the
results, they closed down 1.2 percent, underperforming a 0.8
percent decline in the broader market.
A first-quarter fall in profits will come, however, after a
very strong fourth quarter that saw LG Display book 587 billion
won ($550 million) in operating profit, one-third higher than
the market consensus and up from an operating loss of 155
billion won for the same period a year earlier.
Helped by a rebound in TV sales as well as solid iPhone
sales, the results also mark its highest quarterly profit since
the second quarter of 2010 and a continuation of a turnaround
that began in July-September after seven straight quarters of
losses, mainly due to an industry oversupply of TV panels.
Sales for LG Display, which vies with Samsung Electronics Co
Ltd's panel unit for the top position in liquid
crystal display flat screens globally, jumped to 8.7 trillion
won in the quarter, a quarterly record. That was up 32 percent
from a year earlier and 15 percent higher from the previous
Apple sold some 20 million more iPhones in the December
quarter from the previous quarter, as it expanded iPhone 5
sales. The introduction of the iPad mini also boosted LG
Display's panel shipments.
The iPhone sales, however, fell short of expectations,
fanning fears that its dominance of the mobile industry is
In forecasts made prior to Apple and LG Display's results,
analysts said they expected LG Display's first-quarter operating
profit to tumble to around 123 billion won.
Two industry sources told Reuters last week that rival Sharp
Corp of Japan has nearly halted production of 9.7-inch
screens for iPad, possibly as demand shifts to the iPad mini.
Sharp supplied around 17 percent of Apple's iPad screens in
the fourth quarter, while Samsung provided 12 percent, according
Apple's Chief Financial Officer Peter Oppenheimer said iPad
sales are expected to fall in the first quarter, as they
normally do after the year-end holiday season.