LG Display Co., which supplies panels for Apple Inc. devices, reported profit that missed analyst estimates as weaker prices for TV panels outweighed increased sales of screens for new iPhone and iPad devices.
Net income, excluding minority interests, was 71.5 billion won ($67 million) in the quarter ended Dec. 31 from 314.2 billion won a year earlier, the Seoul-based company said in a regulatory filing today. That missed the 159.9 billion won average of eight analyst estimates compiled by Bloomberg.
Lackluster demand for televisions prompted panel price cuts as competition among Asian TV makers, including Samsung Electronics Co., LG Electronics Inc. and Sony Corp. intensified. LG Display forecast first-quarter profit to fall from the previous quarter because of weak seasonal demand as shipments for new iPhones and iPads fail to make up for slower TV growth.
“The TV industry doesn’t seem to be structurally on the recovery path yet,” Hwang Joon Ho, a Seoul-based Daewoo Securities Co. analyst, said before the earnings release. “Panel sales for mobile devices may stay solid this year, but that isn’t enough to offset declines at its TV business.”
Shares of LG Display fell 0.4 percent to close at 26,850 won in Seoul, while South Korea’s benchmark Kospi index declined 1.2 percent.
Operating profit, or sales minus the cost of goods sold and administrative costs, was 257 billion won on sales of 7.08 trillion won.
“Looking ahead, we expect profits in the first quarter of 2014 to decline quarter-on-quarter due to traditional seasonal decline in panel shipments and price,” Chief Financial Officer Don Kim said in a statement. “But we will do our utmost to overcome the challenges.”
Apple shipped an estimated 55 million iPhones and 25 million iPads in the fourth quarter, according to a Jan. 20 report from Mirae Asset Securities Co.
The expected release of larger-screen iPhones and a series of sports events, including the winter Olympic games in Russia and the World Cup in Brazil, this year will drive display sales, said HMC Investment Securities Co. in a Jan. 16 report.
Sales of mobile phone and tablet displays, accounted for 35 percent of LG Display’s revenue in the fourth quarter, the company said in the statement. That compares with 25 percent during the previous three-month period. TV panels accounted for 37 percent of sales, down from 44 percent the previous quarter.
The world’s two top TV makers, Samsung Electronics Co. and LG Electronics, are pushing ahead with a ultra high definition TVs with curved designs as they seek to revive shrinking global demand and stagnating prices.
LG Electronics said at the international Consumer Electronics Show in Las Vegas on Jan. 6 that it will release 12 new TV models with ultra HD display technology this year. Separately, it announced a TV with a flexible screen using organic light emitting diode technology, joining Samsung in displaying sets that adjust viewing angles.