SEOUL (Reuters) - Top Asian LCD makers are set to report upbeat quarterly results and may forecast robust demand as buoyant TV sales and new product launches such as Apple’s (AAPL.O) iPad reinforce a recovery in the sector.
The liquid crystal display (LCD) industry bounced back from a downturn last year partly due to China’s TV-buying spree.
“The overall trading would be very good and the outlook is also quite positive, as strong demand from China and TV sector will add to a broad recovery in the global technology sector,” said Lee Hak-moo, an analyst at Mirae Asset.
The LCD industry’s notorious boom and bust cycle, which has mostly followed the global computer and notebook sector, is becoming less volatile as the industry shifts to consumer TVs, which is forecast to grow strongly this year.
Research firm DisplaySearch raised its global LCD TV shipment forecast for 2010 to 180 million units last month against overall revised TV sales of 228 million sets.
TVs now account for more than half of the global LCD demand and is set to grow further as more households buy LCD TVs for their living rooms, bedrooms and even kitchens and bathrooms.
“LCD supply will likely remain tight until mid third-quarter due to strong demand for corporate PCs and LED-backlit LCD TVs,” said Soh Hyun-cheol, an analyst at Shinhan Investment Corp.
South Korea’s LG Display (034220.KS), the world’s No.2 LCD maker, is set to report an operating profit of 604 billion won ($544 million) in January-March versus a deep loss a year ago and up 70 percent from the previous quarter, according to Thomson Reuters I/B/E/S.
“There might be earnings surprise by LG Display as demand was strong even during the seasonally weak first quarter, which resulted in shipment and supported panel prices,” said Kim Jung-soo, an analyst at Solomon Investment & Securities.
AU Optronics Corp (2409.TW), Taiwan’s biggest and the world’s No.3 LCD maker, is expected to swing to a profit from a year-ago loss, according to Thomson Reuters I/B/E/S.
On a consolidated basis, Samsung’s LCD business will likely swing to an operating profit margin of about 10 percent in the first quarter from 8 percent loss a year ago and 8 percent profit in the fourth quarter, according to analysts.
Samsung, which had forecast this month that first-quarter earnings may come at a record 4.3 trillion won in operating profit, reports results on April 30.
LG Display, a supplier to Apple’s iPad tablet PC said it was struggling to meet demand and is spending $1.3 billion to raise output.
Major producers including LG, Samsung and AU are also awaiting approvals from Chinese government to build plants in the country, which is set to become the world’s biggest LCD TV consumer next year.
LG Display shares rose 6 percent and Samsung has gained 3.5 percent so far this year, versus a flat broader market .KS11. AU shares fell 11 percent compared with a 3 percent drop in the Taiwan benchmark .TWII.
Company Estimated Q1 Year ago Qtr ago Date
LG Display 604 bln won (412 bln won) 357 bln won April 22
AU Optronics T$3.6 bln (T$20.2 bln) (T$7.9 bln) April 22
NOTE:Estimates are based on data from Thomson Reuters I/B/E/S. Figures for LG Display are consolidated operating profit and forecasts for AU are based on net profit.
Editing by Anshuman Daga