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LG loses half its profits

by on23 January 2014

Life's Bad

LG Display has seen its profit more than halved in the fourth quarter as soft demand for TVs continued to compress screen prices.

LG Display has been pouring funds into next-generation technology to tempt consumers to upgrade from liquid-crystal display television sets. Sales in emerging economies such as China are mainly of cheap models. As a result, the TV set industry is worth $96 billion from $120 billion in 2010, according to analysts. LG Display and other panel makers can’t raise prices and this stuffs up earnings.

Operating profit at LG Display, the world's biggest LCD maker, fell 56 percent on year in October-December to $241 million. Shares of LG Display, worth $11.15 billion, closed down 0.4 percent ahead of the earnings release, compared with the benchmark index which was 1.2 percent lower.

LG Display Chief Financial Officer Don Kim said in a statement he expected profit in the first quarter of 2014 to decline quarter-on-quarter due to traditional seasonal decline in panel shipments and price. The company said it expects LCD shipments to fall around 10 percent to 15 percent in the first quarter, and that price declines may ease.

LG Display earned 37 percent of revenue from TV screens, down from 43 percent a year earlier. Revenue from smartphone and tablet screens rose to 35 percent from 31 percent.

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