By Kim Yoo-chul
LG Display, the world’s biggest flat-screen manufacturer, is expected to record earnings above market projections in the second quarter of this year thanks to soaring demand for display applications, sources and analysts said Sunday.
“Operating profit during the April-June period will reach between 300 billion won and 350 billion won level,” said one source, who is familiar with the issue. He asked not to be identified.
The firm will publicize its second quarter earnings report on July 18 and invite institutional investors to a meeting at its head office.
According to a median forecast by FN Guide, an online financial information provider, the firm is believed to have gained 210 billion won in operating profit during the quarter, while the quarterly revenue will reach 7.3 trillion won.
“Demand for high-end display applications such as tablets and televisions remained healthy. Concerns over profitability and less demand for display applications were overblown,” said the source.
LG Display declined to comment further on the earnings outlook.
Markets are waiting for an announcement of the upcoming LG earnings with keen attention as the report would be seen as the guideline to analyze the moves of the global display industry.
“Against earlier concerns, there are strong possibilities that LG Display will beat market projections. We have no big question that LG will continue the uprising momentum in the current quarter,” said Kyobo Securities analyst Choi Ji-soo.
Choi, who predicted LG will report 331 billion won in operating profit and 7.23 trillion won in revenue during the latest quarter, added that the better-than-expected quarterly performance will ease investors’ concerns about the company’s profitability.
LG is the primary display supplier for Apple’s iPhones and iPads. It also sells flat-screens to LG Electronics, a sister company that holds 37.9 percent of LG Display stakes.
“We believe Apple will release its updated iPhone 5, tentatively named as the iPhone 5S, in September, and budget iPhones and iPads are also to be introduced soon, significantly helping the company boost its profit,” said Hi Investment Securities analyst Chung Won-seok.
Choi from Kyobo pointed out that LG’s profit is dependent upon sales of new iPhones in China. “If iPhone sales make soft-landing in China, then that will be a big momentum to push LG Display shares,” the analyst said.
In large-sized panels, the firm is ready to sell its OLED displays and LCD screens that support the ultra high-definition picture quality from the latter half.