By Joyce Lee
SEOUL (Reuters) - South Korea's LG Display Co Ltd <034220.KS>, the world's biggest maker of LCD panels for TVs, said fourth-quarter operating profit fell 95 percent on-year to its lowest level in nearly two years.
The results missed market expectations due to falling panel prices and larger-than-expected investment into small organic light-emitting diode (OLED) screen development and production, the firm said.
The Apple
That's LD Display's lowest quarterly operating profit since April-June 2016.
"The downward trend in panel prices is anticipated to continue, but prices are expected to stabilise at the end of the first quarter," Chief Financial Officer Don Kim said in a statement, adding panel shipments during the first quarter is expected to decrease by a high-single digit percentage due to off-season lower demand.
Sales of liquid crystal display panels for mobile phones during the quarter are seen lagging previous years' sales, analysts said, amid sluggish demand and because Apple's latest iPhone model opted for OLED panels instead of LCD panels.
Prices of LCD TV panel prices fell 20-40 percent last year after their previous rise constrained demand for large-size TV sets, said WitsView, part of research provider TrendForce.
However, WitsView said price drops are expected to ease in 2018 as TV shipments rebound and lower panel prices spur TV makers to stock up on inventory. Also, the supply-and-demand is seen more balanced as new lines from companies such as China's BOE Technology Group <000725.SZ> are still ramping up production quality.
LG Display also leads the industry in OLED panels for TVs but rival Samsung Electronics's <005930.KS> display business dominates the industry for small OLED panels used in mobile phones -- a market the LG is trying to penetrate.
In December, South Korea approved LG Display's plan to build a OLED panel production facility in China, as the firm works to grow its OLED business and make inroads against Samsung in OLED smartphone displays.
($1 = 1,068.0500 won)
(Reporting by Joyce Lee; Editing by Tom Brown)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
