Jan. 24 (Bloomberg) -- LG Display Co., the world’s second-largest maker of flat panels, reported quarterly profit that trailed analyst estimates because of slowing demand for Apple Inc. iPads and a stronger won.
Net income was 319.7 billion won ($299 million) in the three months ended December, compared with the 363.4 billion-won average of 22 analyst estimates compiled by Bloomberg. Fourth-quarter sales rose 15 percent to 8.7 trillion won, according to a statement today. The LG Electronics Inc. affiliate had a 6 billion won loss a year earlier.
The company suffered as consumers shunned Apple’s original iPads in favor of a new mini version, which uses less lucrative screens, and as Samsung Electronics Co. smartphones dented the allure of iPhones. The strengthening won is also cutting the repatriated value of the panel-maker’s sales from overseas.
“The iPad mini business is little help to LG Display because of the low price point and razor-thin margins,” said Daniel Kim, a Seoul-based analyst at Macquarie Group Ltd. “We are also incrementally concerned about Apple’s long-term edge in smartphones.”
Cupertino, California-based Apple yesterday reported the slowest quarterly sales growth since 2009. The company accounted for about 20 percent of LG Display’s sales last year, according to Seoul-based Korea Investment Trust Management analyst Yoo Jong Woo. Samsung makes its own smartphone displays.
LG Display’s operating profit, or sales minus the cost of goods sold and administrative costs, almost doubled to 587 billion won, compared with a loss a year earlier.
The company plans capital spending of as much as 4.5 trillion won, little changed from last year, Chief Financial Officer James Jeong told reporters in Seoul. First-quarter profit will also be lower than in the fourth quarter, he said.
“A strong industry recovery isn’t expected this year,” he said. “We will continue to strengthen our specialty products portfolio and try our best to stay in the black.”
Specialty products, such as 3-D and high-resolution panels, will account for 70 percent of sales this year compared with about 55 percent last year, he said.
The LG Display fell 1.2 percent to close at 28,550 won in Seoul trading before the earnings announcement, while the benchmark Kospi index declined 0.8 percent. The panel-maker has lost 8.1 percent this month after gaining 27 percent last year.
Shipments of screens for 9.7-inch iPads fell to 1.5 million units in November from more than 4 million in October, Daewoo Securities Co. analyst Jonathan Hwang said in a Jan. 7 report. The company shipped 3 million of the 7.9-inch panels in November, he said. Apple unveiled the iPad mini, which uses the 7.9-inch screens, in October.
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