SEOUL (Reuters) - South Korea’s LG Display Co Ltd (034220.KS) swung to a bigger-than-expected quarterly operating loss on Wednesday following a drop in liquid crystal display (LCD) panel prices.
The Apple Inc (AAPL.O) supplier posted a loss of 437 billion won ($372.7 million) for July-September, versus a profit of 140 billion won in the same period a year earlier.
The result - LG Display’s third consecutive on-quarter loss - compared with analysts’ forecast for a loss of 322 billion won, according to Refinitiv SmartEstimate based on the estimates of 22 analysts.
Revenue fell 5% to 5.8 trillion won, the company said in a stock exchange filing.
“LCD TV panel prices declined steeper than market expectations,” LG said in a statement, adding that the company would downsize LCD panel production lines.
Prices for LG Display’s main product, 50-inch LCDs for television sets, slid nearly 16% in the quarter from the same period last year, according to data from WitsView, part of research provider TrendForce.
Analysts said Chinese display makers supported by Chinese government subsidies have been aggressively producing panels to ramp up market share, resulting in a glut in global supply and driving down prices.
“LCDs have long become a commodity and companies capable of producing larger volumes of panels now have the leverage on determining panel prices, controlling the display market,” said senior analyst Kwon Seong-ryul at DB Financial Investment.
Last month, LG Display announced a voluntary redundancy programme for domestic production line employees amid deepening losses to help increase cost efficiency in panel production.
The quickest way LG Display can counter the impact of TV panel price declines is by winning a sizable order for organic light-emitting diode (OLED) panels for Apple’s new iPhone models, analysts said.
LG Display's share price has fallen 21.3% this year to date, compared with a 1.9% rise in the benchmark index .KS11.
($1 = 1,172.5300 won)
Reporting by Heekyong Yang, Ju-min Park and Hyunjoo Jin; additional reporting by Hayoung Choi; Editing by Christopher Cushing and Richard Pullin