LG Display has reported record quarterly earnings for the first three months of this year, beating market estimates on strong demand for large television panels.
The world’s largest flat panel maker said on Tuesday operating profit in the first quarter jumped nearly 26-fold from a year earlier to more than Won1tn ($915m), higher than an average forecast of Won845bn compiled by Reuters. Its net profit surged from Won1.2bn a year earlier to Won679.5bn as sales increased 17.9 per cent to Won7.1tn.
The South Korean company, which counts Apple and its affiliate LG Electronics as its main clients, forecast similar panel shipments in the second quarter on stable panel prices.
“Panel shipments by area in the second quarter of 2017 are expected to reach a similar level as the first quarter, while TV panel shipments are anticipated to decrease or stay flat due to continued trends toward large-size panels,” said Don Kim, CFO of LG Display.
LG Display shares gained 0.5 per cent to Won31,350 on Wednesday morning, slightly outperforming a 0.3 per cent rise in the Kospi benchmark index.
Despite the strong results, investors are concerned about the company’s outlook in the coming quarters, as higher panel prices may damp down orders from TV makers and Apple’s likely adoption of OLED screens for the next iPhone is expected to reduce sales to its long-time key customer.
LG Display has so far focused on large panels for televisions, trailing cross-town rival Samsung Display in production of small-size OLED panels, which Samsung Electronics has long used for its flagship Galaxy smartphones. Second-ranked Samsung Display controls more than 90 per cent of the small-to-mid-size OLED screen market.
Analysts believe Samsung Display will become a main supplier of OLED panels for the next premium iPhone model due in the second half of this year, dealing a blow to LG Display, which currently has insufficient capacity to supply OLED panels for smartphones.
LG Display has belatedly turned its attention to the lucrative market for small-size OLED panels, announcing a $1.75bn plan last year to invest in flexible OLED panels for smartphones.