LG Display turns a profit for the first time in seven quarters

Industry

Published: 22 Oct. 2020, 18:13

LG Display turns a profit for the first time in seven quarters

LG Display turned a profit for the first time since the fourth quarter of 2018 as the shipment of panels for computer monitors and laptops shot up on increased demand from people working and studying at home due to the coronavirus pandemic.

With prices of liquid-crystal displays (LCDs) increasing in the quarter, the company decided to delay its plan to fully retreat from the old display category.

The panel maker reported 164.4 billion won ($144.9 million) in operating profit during the July-September period, a dramatic turnaround from the negative 517 billion won in the previous quarter and negative 436 billion won a year earlier.

Net profit rose to 11.1 billion won, up 102 percent on year, while sales increased 16 percent to 6.7 trillion won from a year ago.

The upbeat result put an end to six consecutive quarters of losses, which were attributed to slower-than-expected adoption of organic light-emitting diode (OLED) displays and declining prices of LCDs.

The display maker highlighted a strong demand for IT products as the main driver for sales growth.

The screens for IT products — mainly gaming and computer monitors and laptops — accounted for 43 percent of sales in the third quarter, TV panels 28 percent and phones and other devices 29 percent.

The shipment of Plastic OLEDs, the OLED panels used for smartphones or infotainment screens, to Apple for the new iPhone 12 was a key driver.

The company got a big lift from the operation of its new factory in Guangzhou, China, which opened in July, as the plant helped meet the gradually increasing demand for large OLED TV panels.

Since LG Display is the sole supplier of large-sized OLED panels globally, the opening of another OLED production line came at the right time to expedite a full transition toward the next-generation panels from traditional ones like LCDs.

The display unit said that it will take on “a flexible approach” in producing LCDs by focusing on those for laptops and computer monitors.

“We will convert some of the production lines for LCD TVs into lines for IT products,” the company said in a statement.

“[LG Display] will respond nimbly to the short-term supply and demand and client needs in terms of LCD TV production,” it said.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]