LG Disaply posts losses for 6 quarters in a row
By Kim Yoo-chul
LG Display posted an operating loss for the first quarter of this year as economic uncertainties sapped consumer demand for digital devices such as televisions.
But the company, one of the critical units of LG Group, is confidant of seeing a turnaround in the second quarter as it believes it will get more screen orders from major companies ahead of the upcoming Summer Olympics in London.
During the January-March period, LG saw its operating loss rise to 178 billion won from 148 billion won in the previous quarter, it said in a regulatory filing to the Korea Exchange (KRX), the nation’s main bourse operator.
LG Display extended its losing streak for the six straight quarters since the fourth quarter of 2010.
Revenue for the first quarter was also cut by 6 percent to reach 6.18 trillion won from 6.61 trillion won during the same period, while net losses were 129 billion won, LG said in the filing.
``The first quarter was not so bad, though we’ve reported an operating loss. Panel prices will rise in the second quarter and we will ship more premium products for use in three-dimensional (3D) televisions and tablets,’’ said the company’s chief public relations officer Sohn Young-june.
Prices are the key to the profitability of an LCD maker such as LG Display. The industry is highly volatile and cyclical according to macro-economic moves.
Usually, LCD makers report their biggest earnings in the third quarter because set makers order more panels ahead of the year-end Christmas shopping season.
As of the end of the first quarter, LG Display maintained a debt ratio of 145 percent, while its cash-equivalent assets were 2.39 trillion won, according to the company.
``Screen prices have been showing signs of increasing since early April thanks to re-stocking demand from TV makers, helping LG strengthen its bottom line. We have no big questions about LG Display’s turnaround in the second quarter,’’ said Jeong Han-sub, an analyst at SK Securities.
LG Display is supplying its screens to Apple’s i-branded devices since the latter released its first iPhone in 2009.
LG is also increasing its panel shipment for the company’s latest tablet ― the iPad 2 after meeting stricter quality demands.
It is also supplying more of its 3D panels to Japan’s Sony, Panasonic and even Sharp.