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LG display profit beats 3Q estimates

LG Display Co, the world’s second-largest maker of liquid-crystal displays (LCD), reported third-quarter profit that exceeded analysts’ estimates as production cutbacks helped ease oversupply in the US$89 billion industry.

Third-quarter net income fell 44 percent to 295 billion won (US$244 million), from 524 billion won a year earlier, the Seoul-based company said yesterday. Profit, which includes a gain from currency exchange, exceeded the 184 billion won median of 15 analyst estimates in a Bloomberg survey.

Overproduction, spurred by record earnings last year, forced LG Display and Taiwan’s two biggest LCD makers to scale back expansion plans as the credit crisis threatens to send the global economy into recession and sap demand for computers and TVs. The better-than-expected results suggest the production cutback is helping ease the glut, Credit Suisse Group and UBS AG said.

Sales declined 2.3 percent to 3.86 trillion won, compared with analyst estimates of 3.92 trillion won.

Operating profit, or sales minus the cost of goods sold and administrative expenses, dropped 63 percent to 254 billion won. The company was projected to report operating profit of 221.4 billion won, the analysts said.

Industry leader Samsung Electronics Co, Taiwan’s AU Optronics Corp (AUO, 友達光電) and Chi Mei Optoelectronics Corp (奇美電子) will all post their first profit decline from displays since the first quarter of last year when they report earnings later this month, based on the Bloomberg survey.

LG Display shares gained 9.2 percent to 28,500 won before earnings were reported.
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