LG Display posts solid Q3, warns of weak TV panel prices

Reuters
An LG Electronics' logo is pictured on a laptop computer displayed at a shop in central Seoul, July 23, 2013. REUTERS/Lee Jae-Won/Files
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An LG Electronics' logo is pictured on a laptop computer displayed at a shop in central Seoul, July 23, 2013. REUTERS/Lee Jae-Won/Files

SEOUL (Reuters) - LG Display Co Ltd posted its highest quarterly profit this year thanks to increased sales of displays for devices such as Apple Inc's (NSQ:AAPL) iPhone, but said prices for mainstay TV displays will keep falling along with TV set demand.

The LG Electronics Inc unit, which competes with Samsung Electronics Co Ltd's Samsung Display, is capitalising on a boom in smartphones, as cathode ray tube TV replacement demand tapers off in developed markets.

LG Display posted a 31 percent increase in operating profit to 389 billion won for July-September compared with a year earlier. The mean estimate of 16 analysts polled by Thomson Reuters was 384 billion won.

TV panels generated 44 percent of revenue compared with 47 percent a year earlier, whereas mobile and tablet displays yielded 25 percent from 24 percent.

TV "panel prices are not likely to rebound soon, but their rate of decline is likely to slow down," James Jeong, CFO of the biggest maker of liquid-crystal display panels, said in a statement on Thursday.

LG Display did not provide a forecast rate of decline, but said TV panel shipments are likely to rise around 5 percent in October-December.

Overall shipments of LCDs for TVs fell in the third quarter from the traditionally weak second quarter for the first time, according to researcher IHS iSuppli. Analysts say this raises concern because TV LCDs draw the most revenue and because growth in the smartphone market is slowing.

The decline in TV LCD sales is widely attributed to weak demand in China, as well as in markets where many households have replaced bulky TVs with flat-screen models.

Shares in LG Display have fallen almost 20 percent over the past two months whereas as the benchmark index (.KS11) has risen 7.4 percent. They closed up 0.2 percent prior to the earnings announcement compared with a rise of 0.3 percent in the benchmark. (Reporting by Miyoung Kim; Editing by Christopher Cushing)

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