SEOUL (Reuters) – South Korea’s LG Display Co Ltd said on Wednesday fourth-quarter operating profit leapt more than six-fold from a year earlier, on the back of strong demand for its small panels including for smart watches.
The Apple Inc supplier’s operating profit for October-December came in at 279 billion won ($249.7 million) from 44 billion won in the same period a year ago, and above the 132 billion won forecast of 10 analysts based on I/B/E/S Refinitiv data. Revenue fell 2.5 percent to 6.9 trillion won.
LG Display said however its panel shipments were expected to fall by a high-single-digit percentage in the first quarter compared with the previous quarter due to seasonally weak demand.
Slowing global handset sales and weaker Chinese economic growth are clouding the outlook for electronics makers and suppliers like South Korea’s LG Display.
Sales of LCD panels for mobile phones during the first quarter are expected to lag those of the same period in the previous year, analysts said.
Prices of 50-inch LCD TV panel prices fell 7 percent in the fourth quarter after a slight rise in the previous quarter, according to data provider WitsView, part of research provider TrendForce.
Price drops were expected to continue into the first quarter, but prices would stabilize starting in the second quarter, WitsView said.
One bright spot in the fourth quarter was sales of small panels with higher prices, which helped drive operating profit growth in the fourth quarter despite weaker large-size panel prices, the company said.
“There was increasing demand for LG Display’s smaller liquid crystal display (LCD) panels especially for Apple Watches during the holiday-shopping season, giving them the chance to make up for the rather poor LCD panel sales performance for Apple’s struggling XR model,” Lee Won-sik, an analyst at Shinyoung Securities, said on Friday
LG Display shares fell 40 percent last year amid a global tech selloff prompted by investor fears over the impact on supply chains of the U.S.-China trade war.
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