LG Display drops on TV price war concerns

By Rhee So-eui

SEOUL (Reuters) - Shares in LG Display Co Ltd (034220.KS: Quote, Profile, Research, Stock Buzz) fell more than 5 percent early on Friday, despite the firm's strong quarterly results, due to growing concerns that the market position of its key client TV makers is weakening.

Analysts said aggressive marketing by leaders Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) and Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz) in the key North American TV market threatened the market share of LG Display's client brands, such as Philips (PHG.AS: Quote, Profile, Research, Stock Buzz), LG Electronics (066570.KS: Quote, Profile, Research, Stock Buzz) and Vizio.

By 0146 GMT, LG Display was down 4.76 percent at 44,000 won in a wider market that was down just 0.2 percent. The stock fell as much as 5.4 percent earlier in the session.

"LG Display's clients will inevitably take a hit from Sony and Samsung's aggressive price cuts," said Park Sang-Hyun, an analyst at CJ Investment & Securities.

LG Display reported on Thursday a record operating profit in the usually slow January-March quarter, helped by tight panel supplies and surging demand for flat-screen televisions ahead of the Olympics in Beijing in August.

However, chief financial officer James Jeong warned that Sony's price-driven marketing could affect LCD screen prices and sales in the second quarter.

Meanwhile, shareholder and major client Philips Electronics said this week it would transfer its struggling North American TV business to Japan's Funai Electric (6839.OS: Quote, Profile, Research, Stock Buzz), triggering worries that LG Display could lose screen orders for the market.

Chief executive officer Kwon Young-soo said late on Thursday Sony's price cuts appeared to be "excessive" and were unlikely to be sustained.