By Kim Yoo-chul
Staff reporter
Flat-panel maker LG display reported better-than-expected second quarter profit and sales driven by rising demand for flat-screen televisions and computer monitors.
However, the company forecasted its growth in profit to slow in the second half due to continuing uncertainties in the global economy and an expected dip in television sales.
LG, the world's second-largest maker of liquid crystal displays (LCDs) behind domestic rival Samsung Electronics, posted a net profit of 555 billion won (about $461 million) for the April-June period, representing a 51 percent increase from the 367 billion won a year earlier.
The company's operating profit more than doubled from last year to reach 726 billion won, while its revenue of 6.45 trillion won marked a 35 percent year-on-year increase.
LG Display, which counts major device makers like Apple, Sony and Dell among its main clients, had benefited from the rebound in the global sales of electronics products and had been boosting its manufacturing capacity to meet the rising demand.
Industry insiders are skeptical whether LG Display could finish 2010 as strongly as it did the in first six months, as economic turmoil continues to mar Europe and other markets.
Despite the impressive report card, LG Display's stocks fell by 3.01 percent to end at 35,400 won per share Thursday.
"The demand for premium television products such as light emitting diode (LED)-backlit LCD televisions propelled our second-quarter performance, and the market got further momentum from major sporting events like the football World Cup," said LG Display's Claire Ohm.
Ohm said the company's panel shipments will continue to rise throughout the third quarter, with the market entering its traditional strong season and the demand for LED-backlit LCD televisions remaining robust.
LCD panels for televisions accounted for more than half of the second-quarter revenue, Ohm said, while sales of computer monitor panels accounted for 23 percent and panels for laptop computers 19 percent.
Despite the boost from the growing sales of electronics products, LCD makers are bracing for turbulence in the latter half of the year as the economic situations in Europe continue to be a major concern.
There are already signs of shrinking panel orders from device makers, who are now tightening their control of inventories, which doesn’t inspire confidence for LG Display, according to industry analysts.
"It's hard to predict how the market for electronics products plays out in the third quarter. LG Display says its shipments will rise by a single digit percentage or in the low double digits, which hints at a conservative outlook," said Yoon Hyuck-jin, an analyst at Shinyoung.
LG Display plans to invest around 618 billion won to expand its 4.5th-generation LCD line during the third quarter to meet the demand for high-end panels mostly used for mobile devices. The company said the new line will go on-line in the fourth quarter of next year.
Sohn Young-june, a senior LG Display spokesman, said the expansion of the line is unrelated to the company providing parts for Apple's new iPhone 4, although the facility will be used for producing organic LED (OLED) panels for premium mobile phones.