* Q2 operating profit 366 bln won vs 304 bln won f'cast
* Forecasts LCD screen prices to be under pressure in Q3
* Shares end down 3.1 pct prior to earnings
By Miyoung Kim and Hyunjoo Jin
SEOUL, July 18 Flat-screen maker LG Display Co
Ltd, a key supplier to Apple Inc, said on
Thursday that it was seeking to broaden its smartphone customer
base, betting that diversification would bolster its second-half
The move came as the South Korean company posted a
forecast-beating 53 percent rise in quarterly operating profit,
as stable prices of large-sized TV screens helped counter slower
growth in mobile display shipments to Apple.
LG Display follows other Asian suppliers that are looking to
ease their dependence on the iPhone maker because of seasonal
orders fluctuations and as Samsung Electronics Co Ltd
erodes market share from Apple. Japanese display
maker Sharp Corp is now aiming to boost sales to
Like many suppliers, LG Display does not officially identify
Apple as a client but analysts and sources say that most of its
mobile screens are sold to the U.S. company.
"In the smartphone business, a specific customer accounts
for a relatively high portion" of our sales, Chief Financial
Officer James Jeong told analysts after the earnings
"We are in talks with various firms on new product line-ups
... We will gradually diversify our smartphone customers," he
said, adding that diversification would help improve its
earnings in the second half of this fiscal year.
Jeong did not specify the customers that the firm is talking
to, but industry sources say it is hoping to ride the coattails
of affiliate LG Electronics Inc, whose once
loss-making smartphone business is on a firm recovery track. LG
Electronics is now ranked as the world's No.3 smartphone vendor
after Samsung and Apple.
LG Display is widely expected to supply super-thin and full
high-definition screens for the upgraded version of LG
Electronics' flagship Optimus G smartphone due out in early
LG Display, which vies with Samsung's panel unit for the top
position in liquid crystal display flat screens globally, made
366 billion won ($326 million) in operating profit for its
April-June second quarter. That beat the average forecast of a
304 billion won profit in a Thomson Reuters poll of analysts.
But sales slipped 5 percent from a year earlier to 6.6
trillion won, missing analysts' expectations for 7.28 trillion
won. LG Display said sales fell because weaker demand for
screens used in mobile devices and laptops more than offset
increases in total panel shipments.
Analysts expect LG Display to enjoy upbeat sales of screens
used in mobile devices in the current quarter with Apple and LG
Electronics planning to launch new products.
Apple is exploring launching iPhones with bigger screens, as
well as less-expensive models in a range of colours, over the
next year, according to people with knowledge of the matter.
But some analysts warn that profit margins could be squeezed
if Apple does introduce low-end models, while sales of premium
televisions using ultra high definition screens as well as
organic light-emitting diode panels remain extremely weak.
A weak global market for televisions, the biggest source of
LG Display's revenue, is also expected to pressure its earnings
growth, analysts say.
Daiwa Capital Markets this month cut its 2013 global LCD TV
shipment growth forecast to 2.2 percent from 4.2 percent. It now
expects global PC shipments, another source of major flat-screen
sales, will shrink 8.8 percent this year, sharper than its
previous forecast for a 4.3 percent drop.
LG Display said it expects overall panel prices to weaken in
the current quarter before they start to recover later in the
Shares in LG Display have dropped 12 percent over the past
three months, lagging a 5.6 percent drop in the broader market
. The stock closed down 3.1 percent prior to the earnings