Sat, Jan 22, 2011 - Page 10 News List

LG Display posts losses after penalty


LG Display Co, the world’s second-largest maker of LCDs, posted its first quarterly loss in almost two years after the EU fined the company for fixing prices.

The net loss was 268.4 billion won (US$239 million) in the three months ended on Dec. 31, the company said in a statement yesterday. The median estimate in a Bloomberg News survey of five analysts was for a fourth-quarter loss of 413 billion won.

The company said the drop in TV display prices was likely to extend into this quarter after fourth-quarter average prices tumbled 14 percent.

LG Display is counting on demand for displays in mobile devices to help spur a recovery in earnings.

“The current quarter will be tough as well because we’re not seeing a remarkable recovery in demand,” said Im Jeong-jae, a fund manager in Seoul at Shinhan BNP Paribas Asset Management Co, which oversees US$28 billion of assets. “Still, the share price has already underperformed a lot and I think we’re nearing a bottom.”

LG Display, which makes displays for Apple Inc’s iPhone and iPad, fell 1.7 percent to close at 37,300 won in Seoul trading. The benchmark KOSPI declined 1.7 percent.

The company posted an operating loss, including the fine, of 387 billion won on sales of 6.48 trillion won.

The EU fined LG Display and five other panel makers, including Chimei Innolux Corp (奇美電子) and AU Optronics Corp (友達光電), a total of 648.9 million euros (US$876 million) for fixing LCD panel prices, EU Competition Commissioner Joaquin Almunia said on Dec. 8.

A penalty of 215 million euros was imposed on LG Display, which has said it may appeal the order.

The company reflected the fines as an operating loss, it said in the statement yesterday.

Panel prices likely dropped more than 20 percent in the fourth quarter from a year earlier, NH Investment amd Securities Co analyst Kang Yoon-hum said.

Annual shipments of LCD TVs in the US were projected to have fallen for the first time last year amid low consumer confidence, market researcher ISuppli Corp said last month.

LG expects total display area shipment in the first quarter to fall by a high single-digit percentage from the previous quarter, it said in an e-mailed statement yesterday.

It also anticipates the fall in TV panel prices to ease and computer panel prices to remain stable in the first quarter.

Fresh orders may come this quarter from TV makers after they cleared inventories at the end of last year, Daishin Securities Co analyst Kang Jeong-won said.

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