LG Display records first profit in 7 quarters, future outlook remains unstable

LG Display profit: South Korean flatscreen manufacturer LG Display has expressed concerns about economic instability in the coming year, despite posting its first profit in seven quarters. The company attributed the profit to increased shipments of smartphone screens and TV panels during the year-end holiday season.

LG Display's Chief Financial Officer, Sung-hyun Kim, acknowledged the likelihood of continued market volatility in the face of prolonged unstable macroeconomic conditions. Despite these challenges, the company is determined to strengthen the competitiveness of its organic light-emitting diode (OLED) businesses.

For the October-December quarter, LG Display reported an operating profit of 132 billion won ($98.67 million), a major turnaround from the loss of 876 billion won recorded in the same period the previous year. This result aligned with LG Display's earlier estimate released in the month.

The surge in profitability was attributed to increased shipments of OLED displays for smartphones and growing demand for large and medium-sized screens for products such as TVs and notebooks during the holiday season.

Looking ahead, the company anticipates a potential weakening of earnings in the current quarter due to low seasonal demand. However, analysts project an overall improvement in full-year earnings compared to the previous year's 2.5 trillion won operating loss, driven by the overall improvement in demand for electronics products.

LG Display, a supplier for Apple, is set to benefit from the upcoming sales of Apple's new headset Vision Pro, starting next month. Additionally, the company is expected to enhance its supply of liquid crystal display (LCD) panels for Samsung Electronics' TVs in the current year.

Despite the positive outlook, LG Display announced a reduction in its 2024 investment to around 2 trillion won, down from 3.6 trillion won in 2023. The decision aims to strengthen financial soundness, focusing on essential investments and projects agreed upon with customers.

LG Display's shares closed down 2.2 per cent, outpacing the broader market's 0.4 per cent drop. Fourth-quarter revenue showed a 1 per cent increase from the previous year, reaching 7.4 trillion won.

(With Reuters inputs)