LG Display profit drops, hit by lower TV panel prices

South Korea’s LG Display posted on Wednesday a 30% drop in quarterly operating profit on the year, hit by a steep decline in TV panel prices that offset solid shipments of smaller screens used for computers, laptops and smartphones.

The Apple supplier posted an operating profit of 476 billion won ($397.64 million) for the October-December period, down from 678 billion a year earlier.

It missed an average analyst forecast of 588 billion won compiled by Refinitiv SmartEstimate. LG Display said that excepting a year-end one-off cost involving sharing profits with executives and employees, its result was in line with market expectations.

Revenue rose 18% on year to 8.8 trillion won.

During October-December, prices of 55-inch liquid crystal display (LCD) panels for TV sets fell 37% from the previous quarter, according to market data from TrendForce’s WitsView.

However, LG Display managed to avoid a bigger dent to profits, analysts said, as only 27% of sales came from television panels during the quarter.

Solid shipments of high-end LCD panels for notebooks and monitors, whose prices declined by less than LCD TV panel prices in 2021, as well as higher-margin OLED panels for smartphones and TVs, should help LG defend its results this year, analysts said.

“The stay-at-home demand for notebooks, tablets and other devices is expected to gradually fall as COVID-19 lengthens and distancing rules ease,” said Kwon Jae-young, Vice President and Head of Medium-Small Display Marketing Division.

“However, back-to-office and corporate demand from gradually improving economies is expected to increase, so overall demand for such devices in 2022 is expected to remain similar to 2021.”

Shares of LG Display ended down 0.7%, versus the wider market’s 0.4% fall.