LG Display Co. (034220), the world’s second- largest maker of liquid-crystal displays, reported its third consecutive quarterly loss after television demand slowed and shipments of some products were delayed.
The net loss was 129.2 billion won ($113 million) in the three months ended in March, from a loss of 115.4 billion won a year ago, the Seoul-based company said in a statement today. That compares with a 124.6 billion-won loss average of 23 analysts’ estimates compiled by Bloomberg.
Worldwide TV shipments fell last year for the first time since at least 2004, according to DisplaySearch, hurting demand for the South Korean company that’s counting on 3-D screens and mobile devices to return to profit. LG Display also was unable to ship panels for the initial batch of the new Apple Inc. iPads after failing to meet the Cupertino, California-based company’s quality requirements, research company IHS Inc.’s iSuppli said.
“It was inevitable that the first quarter was going to be bad because panel demand in China was so bad and they had defects on the new iPad side,” said Choi Do Yeon, a Seoul-based analyst at LIG Investment & Securities Co. “If the 3-D portion increases, earnings will certainly improve, but we also need to see how well they do on the new iPad.”
The company may return to profit in the second quarter as global sporting events likely will spur demand amid low inventory, LG Display said in the statement today. Higher-value products, such as panels for 3-D TVs and mobile devices, will also help improve profitability, the company said.
Delays in the development of some panels resulted in LG missing its earnings goal for the first quarter, Chief Financial Officer James Jeong said at a briefing, without elaborating.
“The level of difficulty for key new products has increased,” he said.
LG Display likely will ramp up production of displays for the new iPad in April, iSuppli said March 15. The company gets about 2.1 percent of its revenue from Apple, according to data compiled by Bloomberg. Shipments of all products will be normal from the second quarter, Jeong said.
LG Display shares fell 0.9 percent to 26,350 won before the announcement. The benchmark Kospi index declined 0.5 percent.
Operating loss, or sales minus the cost of goods sold and administrative costs, was 178.2 billion won on sales of 6.18 trillion won, the company said.
Global LCD TV shipments were probably 206 million units last year, falling short of an earlier projection of 211 million units, according to research company DisplaySearch, part of NPD Group. Last year, global TV shipments fell for the first time at least since 2004.
The LCD industry likely won’t turn around this year as supply outstrips demand and LG shifts focus to developing next- generation TV panels, Jeong said today.
In May, LG will probably start mass producing 55-inch panels using organic light-emitting diodes, or OLEDs, as backlights, Jung Han Sup, a Seoul-based analyst at SK Securities Co., said in an April 16 report.
The company is on track to start mass production of OLED panels in the second half, with a capacity to produce 48,000 a month, Jeong said. The company will switch some of its LCD capacity to OLED production, he said.
OLED TVs are as thin as 4 millimeters (0.16 inches) and produce images sharper than LCD models. LG Electronics Inc. plans to start selling OLED sets this year.
Shipments of OLED TVs may grow to 2.1 million sets in 2015 from 34,000 in 2012, according to Englewood, Colorado-based IHS Inc.’s iSuppli.
To contact the reporter on this story: Jun Yang in Seoul at email@example.com