LG Display Q3 OP triples on year on strong OLED biz, expects turnaround this year

LG Display"s Guangzhou plant in China. [Source: LG Display Co.’]

[Source: LG Display Co.’]

LG Display Co.’s operating profit more than tripled on year in the third quarter driven by robust organic light-emitting diode (OLED) demand and rationalization of its liquid crystal display (LCD) business, which are forecast to help the company swing into profit this year.

South Korea’s leading panel maker disclosed Thursday that its operating profit for the July-September period came to 528.9 billion won ($450.9 million), expanding 221.8 percent from a year ago. The figure was off 24.6 percent from three months ago due to a drop in LCD panel prices and a rise in material costs facility operations costs, the company explained.

Its performance fell short of the market consensus of 639.2 billion won in income compiled by Yonhap Infomax by 17 percent. But shares of LG Display finished Thursday up 6.76 percent at 19,750 won on expectations for a recovery in shipment later this year.

Sales reached 7.22 trillion won, up 3.7 percent on quarter and 7.2 percent on year. Net income surged 9.4 percent from the previous quarter and a staggering 4,067 percent against a year-ago period.

Unfazed demand for high-end TV and IT panels amid prolonged pandemic-led home entertainment boom helped bolster sales of its OLED panels and profitability.

IT panels made up the largest 45 percent in total sales, TV panels 32 percent and mobile display panels 23 percent.

Amid growing volatility in the LCD market, the display maker is expected to speed up its portfolio restructuring to focus more on high-margin products to offset falling prices of LCD panels. It has already cut LCD TV panel production by 40 percent and increased IT panel production by 30 percent.

The company projected its OLED TV sales would reach the yearly target of 8 million units by the end of this year, and will ramp up production to meet the surging demand. It has recently expanded the large-size OLED production capacity at the Guangzhou plant in China by 30,000 panels per month.

“We expect shipments of large OLED panels to expand further thanks to our stronger positioning in the high-end TV market even though the mainstream market is contracting globally,” said Chief Financial Officer Suh Dong-hee.

Panel shipments, disrupted by supply chain bottlenecks, are forecast to recover in the fourth quarter, with shipment projected to jump by about 15 percent from the third quarter, according to LG Display.

On the back of its strong earnings streak, LG Display is expected to swing into the black this year after incurring net losses for the past two years, increasing the possibility of the company resuming dividend payouts for investors.

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