LG Display Co, the world’s second-largest maker of LCDs, posted a loss that’s smaller than analysts estimated on demand for panels for smartphones and tablet computers.
The net loss of 115.4 billion won (US$106 million) in the three months ended last month, compared with an estimate for a loss of 208.4 billion won in a Bloomberg survey of 12 analysts’ estimates, LG Display said in a statement yesterday.
Sales of panels used in mobile devices helped offset falling prices for TV screens, said the company, which makes displays used in Apple Inc’s iPad. Prices of panels for such products as tablet computers and laptops will maintain “an upward trend” in the second quarter, the company said.
“The biggest reason the numbers came out better than expected is because the portion of such higher-valued specialty products increased,” Kang Jeong-won, an analyst at Daishin Securities Co in Seoul said, forecasting the company will post profit from this month, helped by demand for tablet computers.
The operating loss, or sales minus the cost of goods sold and administrative costs, was 239.2 billion won, falling from an operating profit of 789.4 billion won a year ago.
The average price of LG’s panels fell about 17 percent in the first quarter amid slowing TV sales, the company said.
Recovery in spending on LCD TVs has been “particularly slow,” as the latest models equipped with 3D functionality and Web-based services failed to generate fresh demand, said James Song, an analyst at Daewoo Securities Co in a March 15 report.
The average price for flat-screen TVs in the US fell for a third straight month in February, as makers tried to clear inventory before rolling out new models, according to research company IHS ISuppli.
Sales this quarter will be driven by demand for tablet computers, said Hwang Joon-ho, an analyst at Daewoo in Seoul.
“The iPad is the most popular among information--technology products and sales of IT panels will increase a lot from April,” he said before yesterday’s announcement.
Panels for TVs accounted for less than half the overall sales in the first quarter, compared with 54 percent a year ago, according to LG.
Production disruptions in Japan after the March 11 earthquake may tighten supply and help slow falls in panel prices, Hwang said.
Sharp Corp, Japan’s largest maker of LCDs, plans to suspend its two biggest display factories until next month after last month’s natural disaster led to a shortage of materials, Miyuki Nakayama, a Tokyo-based spokeswoman, said on Monday last week.
“A favorable environment is being created” for LG, he said.
Still, rising costs for components after the disaster knocked down factories are a risk for LG, according to an April 8 report by Choi Ji-soo, an analyst at Kyobo Securities Co.
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