SEOUL, Oct 26 (Reuters) – South Korean flat-panel maker LG Display Co Ltd (034220.KS) posted its second straight quarterly loss and cut its capital budget, as soaring inflation and a gloomy economic outlook dealt another blow to demand for TVs and smartphones.
Manufacturers of tech gadgets have made major inventory cuts, and consumer confidence in Europe – a key sales region for organic light-emitting diode (OLED) televisions – has rapidly deteriorated due to the Russian war- Ukraine and the energy crisis, the company said.
Apple Inc. (AAPL.O) The supplier posted an operating loss of 759 billion won ($532.31 million) for the September quarter, compared with a profit of 529 billion won a year earlier.
It missed an average forecast of a loss of 474 billion won from 12 analysts polled by Refinitiv SmartEstimate.
Revenue fell 6% to 6.8 trillion won, LG Display said in a regulatory filing. It plans to cut its 2022 capital budget by more than 1 trillion won and flexibly operate its OLED production lines to meet demand.
Weak demand for liquid crystal displays (LCDs) and OLED panels, which led to lower shipments in the third quarter, is expected to continue into the second half of next year for some panels, the company said.
Prices for 55-inch LCD panels for TVs fell 13% in the third quarter from the previous quarter, according to data from TrendForce’s WitsView.
LCD panel prices stabilized in October as panel makers adjusted production, but LG Display is expected to extend losses in the quarter due to weak demand, analyst Jeff Kim said. at KB Securities.
The company announced in July that it would stop production of LCD TVs in South Korea by next year.
“As part of the conservative stance that poor management performance may be prolonged…we will accelerate our exit from the LCD TV business,” LG Display CFO Sunghyun Kim told analysts on Wednesday, without providing details. updated calendar.
In the third quarter, the company derived about 9% of its revenue from LCD TVs, a spokesperson said.
LG Display has been in the red since the second quarter, when it posted its first quarterly operating loss in two years as a pandemic-driven boom in demand for home entertainment devices came to an abrupt end. in a context of rising inflation and interest rates.
Shares of LG Display closed 1.1% after the earnings result while the broader market (.KS11) increased by 0.7%.
($1 = 1,425.8500 won)
Reporting by Joyce Lee and Heekyong Yang; Editing by Jacqueline Wong, Clarence Fernandez and Jamie Freed
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