SEOUL (Reuters) – Apple supplier LG Display Co Ltd reported on Friday its fourth quarterly operating loss in a row, as it struggled with a prolonged decline in liquid crystal display (LCD) panel prices and restructuring costs.
FILE PHOTO: A man walks out of the headquarters of LG Display in Seoul, October 20, 2011. REUTERS/Jo Yong-Hak/File Photo
The smaller-than-expected loss capped a rough year marked by a management shake-up and job cuts even as the South Korean company invests to shift its focus to next-generation organic light-emitting diode (OLED) panels.
The company however predicted meaningful opportunities for earnings improvement from the second half, LG Display Senior Vice President Suh Dong-hee said in a statement, as the company’s OLED plant in China will ramp up production.
LG Display posted a loss of 422 billion won ($361.6 million) in the October-December quarter, compared with an operating profit of 279 billion won in the same period a year ago.
Analysts expected a 578 billion won loss, according to Refinitiv SmartEstimate based on estimates of 22 analysts.
“We will make efforts to achieve a significant revenue increase in large-size OLED panels as our OLED plant in China will ramp up production,” Suh said.
The company launched a voluntary redundancy program last year and said earlier this month it would halt domestic production of LCD TV panels by the end of this year. Related one-time restructuring costs weighed on its results, analysts said.
LG Display reported a loss of 1.4 trillion won in 2019, its worst financial performance in eight years.
LCD panel prices have been falling for years in a market crowded by Chinese rivals. The glut has forced LG Display and rival Samsung Display – a unit of Samsung Electronics – to cut supplies, a move that analysts said could take some pressure off prices in the first half of the year.
But on Thursday, Samsung Electronics said it expected the business to remain weak this year.
LG Display said last year it would invest roughly $2.6 billion in its OLED panels production line in South Korea.
Reporting by Heekyong Yang; Editing by Stephen Coates