LG Display Posts First-quarter Loss on Low LCD Prices
LG Display reported weak first-quarter earnings for the first quarter due to falling LCD prices as the company tries to shift its focus to OLED panels.
The company lost a net 49 billion won ($45.3 million) in the first quarter of 2018, as competition from Chinese manufacturers drove down prices for LCDs.
But the South Korean panel maker said demand for its advanced organic light-emitting diode panels is increasing, contributing to revenue and profit.
The company also had an operating loss of 98 billion won in the first three months this year, compared with a 1 trillion won operating profit in the first quarter of 2017.
The loss "was due to weak demand for panels and to a continued decline in panel prices," the company said in a statement. "LCD panel prices declined more than expected in the first quarter due to [TV] set makers' conservative purchasing strategies, amid growing expectations for an increase in panel supplies from Chinese panel makers," the statement said.
The company is investing aggressively in the new OLED technology, planning to spend 20 trillion won on OLEDs over the next three years. It hopes to earn more than 40% of its TV revenue from the segment.
OLED TVs accounted for around 15% of its LG Display's TV sales, the company said, and it expects that number to reach the mid-20% range this year. It now has 15 big customers for its OLED TV panels, drawing more manufacturers from China, as well as key buyers Sony of Japan and South Korea's LG Electronics.
"We will continue to focus on differentiated products, such as Crystal Sound OLED and Wallpaper OLED panels, " said Kim Sang-don, LG Display's chief financial officer, in a conference call.
LG Display's revenue also fell 20% on the year in the first quarter to 5.6 trillion won. Panels for TVs accounted for 43% of the revenue in the first quarter of 2018, mobile devices for 22%, tablets and notebook PCs for 19%, and desktop monitors for 16%.
LG Display's results also give insight into Apple, which accounts for 29 percent of LG Display's revenues. The Korean company provides LCD screens for Apple devices like the iPhone 8, while more expensive OLED screens for the iPhone X are supplied by Samsung.