Home / World Business
Fri, Jul 17, 2009 - Page 10 News List

LG Display outdoes analysts’ estimates with strong profits


LG Display Co, the world’s No. 2 maker of liquid-crystal displays, reported profit that beat analyst estimates and forecast that prices would rise, fueled by rising demand for the panels.

Second-quarter net income was 302 billion won (US$239 million), almost double the 161 billion won median estimate of 22 analysts surveyed by Bloomberg News. Third-quarter prices will probably increase “gradually” from the preceding three-month period, the Seoul-based company said in a statement yesterday.

LG said shipments will probably increase by a “mid-teens” percentage this quarter and the company raised its capital spending for this year to between 3 trillion won and 3.5 trillion won, compared with an earlier budget of about 2.5 trillion won to meet demand for flat-screen TVs.

“The second-quarter figures are impressive,” said Chang In-whan, president of Seoul-based KTB Asset Management Co. “The recovery in LCD prices in the second half may not be as strong as the first half as the impact of the Chinese government’s subsidies fade.”

Shares of LG Display rose 0.9 percent to close at 34,800 won in Seoul before earnings were reported. The stock has surged 66 percent this year, beating the 27 percent gain by the benchmark Kospi index.

Net income, LG’s first in three quarters, declined 60 percent from a year ago because of lower LCD prices. Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 76 percent to 218 billion won, exceeding the 146 billion won median estimate in the analyst survey.

LG Display, which said last month it isn’t fully meeting customer orders because of stronger demand, announced on Wednesday it would invest 3.27 trillion won to build a new LCD production line. Last month, Austin, Texas-based researcher DisplaySearch raised its full-year estimate for the global LCD television market, citing demand from China and as more consumers replace their bulkier glass-tube sets.

Global revenue from LCD TVs will drop 6 percent this year to US$76 billion, DisplaySearch said, higher than its previous estimate of US$66 billion. Worldwide LCD TV shipments will rise 21 percent to 127 million units, compared with an earlier prediction of 120 million, the research firm said.

Industry leader Samsung Electronics Co and AU Optronics Corp (友達), the largest producer in Taiwan, are scheduled to report earnings next week.

This story has been viewed 1476 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top