South Korea’s LG Display on Tuesday posted a deeper second-quarter operating loss that missed analyst estimates, as a global supply glut pushed down prices of screens for television sets.
The Apple supplier’s operating loss for April-June was KRW 369 billion ($313.02 million) versus a loss of KRW 228 billion in the same period a year earlier. The result compared with analysts’ forecast loss of KRW 268 billion, according to Refinitiv SmartEstimate.
Revenue fell 5 perecnt to KRW 5.4 trillion. Prices for LG Display’s main product, 50-inch liquid-crystal displays (LCDs) for TVs, slid as much as 7.5 percent in the quarter versus the same period last year, showed data from WitsView, part of research provider TrendForce.
Analysts said TV makers have stockpiled panels for fear of changes in import tariffs brought about by Sino-US trade tension, creating rising inventories and growing supply glut in the display market.
“Set makers have been stocking up on panels in advance due to fears of a 25 percent tariff to be placed into effect in the third quarter, leading their panel inventories to pile up and resulting in conservative purchasing,” said analyst Iris Hu at TrendForce.
Earlier on Tuesday, LG Display announced a $2.6 billion investment in its organic light-emitting diode (OLED) panels production line in South Korea.
The Apple supplier earlier forecast a tough 2019 as it invests heavily in OLED panels at a time of weak demand for smartphones and tech gadgets in general.
The display screen maker said in a statement it would continue to expand its lead in the OLED TV market.
LG Display is shifting its mainstay liquid crystal display (LCD) business towards next-generation OLED panels, as the LCD panel industry is crowded with Chinese rivals.
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Source: NDTV Profit