SEOUL (Reuters) - South Korea’s LG Display Co Ltd (034220.KS) said trade conflicts would undermine the global panel business, as it posted a 76 percent fall in third-quarter profit on Wednesday despite a seasonal price boost.
Recovering Liquid-Crystal Display (LCD) prices ahead of the year-end holidays helped the Apple Inc (AAPL.O) supplier swing to profit after two consecutive quarterly losses, but it said the trend was not expected to continue into the fourth quarter.
The outlook for the global display panel market, valued at $164 billion by research firm Mordor Intelligence, was clouded by over-supply from China and fears of the economic impact of rising tariffs and protectionism, the firm said.
“The LCD market is still expected to see double-digit growth in supply. As for demand, market volatility continues to grow, as macro uncertainties are aggravated by tariffs, trade frictions and foreign-exchange risks in emerging economies,” LG Display Executive Vice President Don Kim told analysts.
LG Display ranks second by unit shipments in the large LCD panel market after China’s BOE Technology Group Co Ltd 000725.SZ, according to IHS Markit data released this month.
It posted operating profit of 140 billion won ($123.2 million) for the July-September quarter, after two quarters of consecutive losses, helped by higher seasonal panel prices. The result beat an average forecast of 79 billion won from 10 analysts, according to a Refinitiv poll, but was still well down on the previous corresponding period amid a global supply glut.
Revenue fell 12 percent from a year earlier to 6.1 trillion won.
Prices for 50-inch (127 cm) Liquid Crystal Display (LCD) television panels began to rebound in August to $117 after hitting a record low of $109 in June, according to data provider WitsView, part of research provider TrendForce.
The costly OLED TV panel business turned to profit in the third quarter, supported by sales volume growth, LG Display said. The firm did not disclose the size of the profit.
Eo Kyu-jin, an analyst at eBest Securities, said the OLED business was not doing enough to shore up profit and the seasonal price rise would peter out in the fourth quarter.
With China’s push into the industry and its miscalculations on panel prices, LG Display has seen tough times, cutting benefits for its employees and planning a voluntary redundancy program.
The firm said it was developing foldable screens but would take time to commercialize them.
Reporting by Heekyong Yang and Ju-min Park; Editing by Stephen Coates