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LG Display losses mount on falling panel prices

SEOUL (Reuters) – South Korea’s LG Display Co Ltd (034220.KS) said on Wednesday its losses mounted in the second quarter due to falling panel prices and weaker demand from television and handset makers.

FILE PHOTO: A woman looks at LG Electronics’ organic light-emitting diode (OLED) TV sets, which are made with LG Display flat screens, at its store in Seoul, South Korea, April 26, 2016. REUTERS/Kim Hong-Ji/File Photo

The Apple Inc (AAPL.O) supplier posted an operating loss of 228 billion won ($202.1 million), compared with an average forecast of a 247 billion won loss derived from a Thomson Reuters survey of 11 analysts.

Revenue for the April-June quarter fell 15 percent from a year earlier to 5.6 trillion won.

It was LG Display’s second consecutive quarterly loss amid an uncertain time for the global panel industry, with Chinese manufacturers ramping up capacity and a glut of LCD output crimping prices and profit margins.

A structural oversupply in panels and fierce competition among display makers were expected to continue, LG said in a statement.

LG is focused on investing in next-generation organic light-emitting diode (OLED) technology, with strong positions in large OLED TV screens.

China recently approved an LG joint venture to run a new OLED factory there, as the company tries to expand its OLED business towards Chinese TV makers.

While the OLED panel business has yet to make a profit for LG, some analysts say it should be earnings-positive from this year.

The LCD business, which analysts estimate makes up more than 90 percent of LG’s sales, is struggling with falling prices as fast-growing Chinese panel makers ramp up their capacity.

Prices of 50-inch LCD panels slid 38 percent in May versus the same month last year, according to South Korean government data.

Reporting by Ju-min Park and Heekyong Yang; Editing by Stephen Coates

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