LG Display surprise loss signals TV, iPhone struggle

By BLOOMBERG

SAN FRANCISCO LG Display Co reported an unexpected loss for the first quarter (1Q), indicating that competition from China is hitting its television (TV) business while demand for Apple Inc’s iPhone 8 is tapering off.

LG Display reported an operating loss of 98.3 billion won (RM356.61 million) for the quarter, compared to analyst estimates of a 12.7 billion won profit. LG, which gets the largest slice of its revenue from the TV business, has faced increasing competition from Chinese rivals that has hurt pricing in the segment.

LG Display’s results also give insight into Apple, which accounts for 29% of LG Display’s revenues, according to data compiled by Bloomberg. The Korean company provides LCD screens for Apple devices like the iPhone 8, while more expensive OLED screens for the iPhone X are supplied by Samsung Electronics Co.

LG’s mobile revenue fell about 32%, suggesting the lower-end iPhone may be suffering from weak demand — on top of the existing concerns about the pricey iPhone X.

“It’s natural that there’s a drop in mobile-phone screens, because Apple has now pivoted to OLED instead of LCD,” said Park Sungsoon, an analyst at Seoul’s Baro Investment & Securities.

LG Display got 43% of its revenue from the TV segment, while mobile, monitors, notebooks and tablets accounted for the rest.

“The biggest reason for the drop has to do with the falling prices of TV panels,” said Park.