Stocksak: LG Display suffers a bigger than expected Q3 loss from slow sales

© Stocksak. FILE PHOTO – People visit the LG display at IFA Berlin, Germany September 2, 2022. REUTERS/Lisi Niesner

Joyce Lee and Heekyong Yan

SEOUL (Stocksak) – South Korean flat-screen manufacturer LG Display (NYSE) Co Ltd suffered its second consecutive quarter loss. Inflation and a gloomy outlook further hampered demand for smartphones and TVs.

According to the company, tech gadget makers have made drastic cuts to inventories and consumer sentiment in Europe. This is an important region for OLED TVs and was affected by the Russia-Ukraine war.

Apple Inc (NASDAQ) supplier reported an operating loss of 759 Billion Won ($532.31 Million) for the September quarter compared to a profit 529 Billion Won a year ago.

It fell short of the average forecast by 12 analysts polled to Refinitiv SmartEstimate of a 474 billion win loss.

LG Display reported that revenue fell 6% to 6.8 billion won in a regulatory filing. It plans to reduce its 2022 investment budget by more that 1 trillion won and to operate its OLED production lines flexiblely to meet demand.

The company stated that the slow demand for liquid crystal display panels (LCD) and OLED panels which dragged down shipment during the third quarter is expected to continue until at least the second half of next years for some panels.

According to TrendForce’s WitsView data, prices of 55-inch LCD panels used in TV sets fell 13% in third quarter compared to the previous quarter.

Prices for LCD panels stabilized in October due to panel manufacturers’ production adjustments. However, LG Display is expected continue to lose money through the current quarter, according to Jeff Kim, an analyst at KB Securities.

The company announced in July that it would cease LCD production in South Korea by the end of next year.

“Under the conservative attitude that poor management performance may continue…we will accelerate the exit from the LCD TV industry,” Sunghyun Kim, Chief Financial Officer at LG Display, told analysts Wednesday without providing a timeline.

According to a spokesperson, LCD TVs accounted for around 9% of the company’s revenue in the third quarter.

LG Display has been in trouble since the second quarter. The company suffered its first quarterly operating loss for two years due to a sudden end to a demand boom for home entertainment products caused by pandemics.

LG Display shares fell 0.8% after the earnings results were announced, compared with a 0.6% rise for the wider market.

($1 = 1,425.8500 won)

News Source and Credit

Stocksak Editorial

We are a financial blog that covers topics such as investing, saving, spending, and earning more money. Please feel free to peruse our site and read any of the articles that catch your interest.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button