LG Display Posts First Loss in Almost Two Years on European Union's Fine
LG Display Co., the world’s second- largest maker of liquid-crystal displays, posted its first quarterly loss in almost two years after the European Union fined the company for fixing prices.
The net loss was 268.4 billion won ($239 million) in the three months ended Dec. 31, the company said in a statement today. The median estimate in a Bloomberg News survey of five analysts was for a fourth-quarter loss of 413 billion won.
The company said the drop in television display prices will likely extend into this quarter after fourth-quarter average prices tumbled 14 percent. LG Display is counting on demand for displays in mobile devices to help spur a recovery in earnings.
“The current quarter will be tough as well because we’re not seeing a remarkable recovery in demand,” said Im Jeong Jae, a fund manager in Seoul at Shinhan BNP Paribas Asset Management Co., which oversees $28 billion of assets. “Still, the share price has already underperformed a lot, and I think we’re nearing a bottom.”
LG Display, which makes displays for Apple Inc.’s iPhone and iPad, fell 1.7 percent to close at 37,300 won in Seoul trading. The benchmark Kospi index declined 1.7 percent.
The company posted an operating loss, including the fine, of 387 billion won on sales of 6.48 trillion won.
EU Fines
The EU fined LG Display and five other panel makers a total of 648.9 million euros ($876 million) for fixing prices in the liquid-crystal display industry, EU Competition Commissioner Joaquin Almunia said Dec. 8. A penalty of 215 million euros was imposed on LG Display, which has said it may appeal the order. The company reflected the fines as an operating loss, it said in the statement today.
Panel prices may have dropped more than 20 percent in the fourth quarter from a year earlier, according to Kang Yoon Hum, an analyst at NH Investment & Securities Co. Annual shipments of LCD TVs in the U.S. were projected to have fallen for the first time last year amid low consumer confidence, research company ISuppli Corp. said last month.
Fourth-quarter profit at Samsung Electronics Co.’s display unit was forecast to fall to 122 billion won from 530 billion won a year earlier, with its TV division likely to post a loss, according to a Bloomberg News survey of five analysts.
Panel, TV Price Outlook
LG expects total display area shipment in the first quarter to fall by a high single-digit percentage from the previous quarter, it said in an e-mailed statement today. It also anticipates the decline of TV panel prices to ease and IT panel prices to remain stable in the first quarter.
Fresh orders may come this quarter from TV makers after they cleared inventories at the end of last year, said Kang Jeong Won, an analyst at Daishin Securities Co. in Seoul. LG Display will benefit from “full-blown growth” of the 3-D TV market this year, Kang wrote in a Jan. 6 report.
LG Display introduced its latest 3-D technology called Film Patterned Retarder, or FPR, which uses polarized glasses to view 3-D images with visual information sent to both eyes simultaneously, last month. It offers an alternative to the shuttered-glasses approach used by Samsung, which produces a 3-D image by sending visual information to each eye sequentially.
To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
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