LG Display swings to Q2 profit on strong demand

(ATTN: ADDS third-quarter outlook in para 9)
SEOUL, July 16 (Yonhap) -- LG Display Co., the world's No. 2 maker of liquid
crystal displays (LCDs), said Thursday that it swung to a profit in the second
quarter on strong demand and rising prices amid an undersupply.
LG Display earned 302 billion won (US$240 million) in the April-June period, a
turnaround from a 255 billion won loss the previous quarter and the first profit
in three quarters, the company said in a regulatory filing. Its bottom line,
however, was down 60.2 percent from 759 billion won a year earlier.
Sales rose 33.4 percent on-quarter to a quarterly record of 4.89 trillion won.
Compared with a year earlier, revenue rose 16.1 percent. The company posted an
operating profit of 218 billion won, compared with a 412 billion won deficit the
previous quarter.
LG Display shares closed up 0.87 percent at 34,800 won on the Seoul bourse. The
results were announced after the close of the stock market.
The company said it swung to a profit in the second quarter from a deficit three
months earlier as a new production line became operational, rolling out large LCD
panels for televisions.
"Amid resilient orders for large LCD panels, the start of mass production at the
new line helped turn around our bottom line," LG Display CEO Kwon Young-soo said.
In March, LG Display began mass production at its eighth-generation LCD
production line in Paju, about 40km north of Seoul.
The company said Wednesday that it plans to invest 3.27 trillion won to add
another eighth-generation production line by the second half of 2010 to raise its
monthly output to 60,000 sheets.
LG Display offered an upbeat outlook for the third quarter, saying its output in
the July-September period will increase more than 10 percent from three months
earlier on resilient demand and rising prices.
LG Display's second-quarter results beat analysts' forecasts.
"LG Display's earnings were rather surprising, compared to what analysts had
estimated earlier this year," said Lee Min-hee, a researcher at Dongbu
Securities. "They had expected a net loss or a much-smaller net profit."
Since May, the liquid crystal display (LCD) industry has been boosted by steep
rises in prices of displays used in TVs. The price of an LCD panel for a 32-inch
TV soared to $205 this month from $160 in February.
"Strong demand for LCD TVs was maintained in China and North America since the
end of last year and pushed the price up," Kim Dong-won, an analyst at Hyundai
Securities, said. "Starting in May, there has been quite a large demand-supply
gap."
Analysts expected that prices of LCD panels will stay strong until around
September when global output fully meets orders.
ygkim@yna.co.kr
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