South Korea‘s LG Display Co Ltd (034220.KS) on Wednesday saw its third-quarter operating profit more than triple as strong television demand boosted panel prices but said it expects the buying spree prompted by the pandemic to slow next year.
The Apple Inc (AAPL.O) supplier posted an operating profit of 529 billion won ($449.36 million) for the July-September quarter versus 164 billion a year earlier.
It missed an average analyst forecast of 600 billion won compiled by Refinitiv SmartEstimate.
Revenue rose 7.2% to 7.2 trillion won.
“Panel shipments in the fourth quarter are expected to increase by mid-10% compared to the third quarter, with the delayed shipments affected by the industry’s component shortage …while the prices of LCD TV panels are expected to remain on a downward trend,” LG Display said in a statement.
LG Display added the strong demand for screens seen during the pandemic would likely slow down starting next year.
“Panel makers including LG Display have enjoyed strong demand of their panels for both TVs and IT devices, including monitors and laptops, because people spent extra time amid COVID shutdowns, but such demand will likely ease as vaccinated people already have begun to spend less time in front of screens,” said Park Sung-soon, an analyst at Cape Investment & Securities.
Prices of LG Display’s mainstay 55-inch liquid crystal display (LCD) panels for TV sets increased by about 57% in the third quarter year on year, market data from TrendForce’s WitsView showed.
Prices for those panels eased 7% in the third quarter from the second, according to WitsView.
But the pace of growth has started easing and may weaken further in the current quarter due to rising supplies and softer demand as more people get vaccinated and spend less time in front of screens, analysts said.
Shares of LG Display ended down 0.3%, versus the benchmark KOSPI’s (.KS11) 0.8% fall.
($1 = 1,177.2300 won)
Reporting by Heekyong Yang and Joyce Lee; editing by Shri Navaratnam and Jason Neely