April 22 (Bloomberg) -- LG Display Co., the world’s second-largest flat-panel maker, posted first-quarter profit that missed analyst estimates on falling sales of smaller displays to Apple Inc. and a weaker currency.
Net income was 3.49 billion won ($3.1 million) in the three months ended March 31, compared with a 129 billion-won loss a year earlier, the Seoul-based company said in a statement today. The average of 25 analyst estimates compiled by Bloomberg was for profit of 76 billion won.
Weakening consumer appetite for Apple’s iPhones and a lack of new devices from the company are damping earnings at its suppliers. Hon Hai Precision Industry Co., assembler of the iPhone and iPad in China, reported its biggest revenue slide in at least 13 years, and Cirrus Logic Inc., a maker of chips, reported an inventory glut that suggested slowing iPhone sales.
“Apple is losing dominance and will likely delay launching a successor to the iPhone 5 until at least September,” Harrison Cho, an analyst for Seoul-based Samsung Securities Co., said before the earnings release. “LG Display might have to wait until the third quarter to see strong profits as Apple’s new devices are mostly expected to be out in the second half.”
Apple’s quarterly profit is projected to shrink for the first time in a decade when the Cupertino, California-based company reports earnings tomorrow. LG Display rose 2.2 percent to 30,450 won at the close of trading in Seoul, while the benchmark Kospi index climbed 1 percent.
Profit also was affected by rising debt payments as the falling won raised the costs of overseas borrowings. LG Display had a total of 13.7 trillion won in debt by the end of the first quarter, said Jean Lee, a spokeswoman for the company, who declined to provide additional details.
The South Korean won fell 4.9 percent versus the dollar this year, according to data compiled by Bloomberg.
“The overseas debt was higher than what the market had expected because the won weakened more than what we had thought,” said Kwon Sung Ryul, an analyst at Dongbu Securities in Seoul.
LG’s operating profit, or sales minus the cost of goods sold and administrative expenses, was 151.3 billion won on sales of 6.8 trillion won.
The company is betting that high-end screens, including TV panels using organic light-emitting diodes, or OLEDs, will lift profit and make up for a drop in sales to Apple. Demand in the world’s largest nation is expected to rise in the second half of the year, Vice President Kim Byung Soo said.
“China demand was relatively strong compared to that of North America and Europe,” said Lee Sung Chul, a Seoul-based analyst at Shinyoung Securities Co. “Chinese TV vendors aggressively promoted their TV sales during the quarter.”
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