LG Display experiences stronger revenue on iPhone demand, rising panel costs

South Korea’s LG Display Co Ltd reported its highest quarterly revenue in over three years on Wednesday, with assist from elevated shipments of Apple Inc’s new iPhones. The Apple provider posted an working revenue of 685 billion received ($622 million) within the fourth quarter of 2020, in contrast with lack of 422 billion received in the identical interval a 12 months earlier.
It was the show panel agency’s highest quarterly revenue for the reason that second quarter of 2017, and soundly forward of market expectations for a 286 billion received revenue, based on a Refinitiv SmartEstimate derived from 12 analyst estimates.”As the worldwide work-from-home scenario continued within the fourth quarter, demand for TV and IT merchandise remained sturdy,”LG Display stated in an announcement.

Shipments and costs of natural light-emitting diode (OLED) panels rose for each TVs and smartphones, whereas the sturdy earnings had been helped by full-scale manufacturing at its Guangzhou OLED plant, the corporate stated. Analysts highlighted elevated shipments of OLED panels for Apple Inc’s new iPhone 12 and better costs for liquid-crystal show (LCD) panels.
LCD costs rose on the again of rising demand for TVs from world shoppers caught at residence as a result of COVID-19 pandemic. Apple’s iPhone shipments within the fourth quarter had been seemingly 21% on-year as a result of sturdy efficiency of the iPhone 12, based on Counterpoint knowledge. Stronger iPhone gross sales ought to spill over into LG Display’s first-quarter consequence, analysts stated.”The first half of the 12 months is normally a seasonal down-cycle, however this 12 months is totally different. It will proceed to swing to revenue, as iPhone 12 gross sales are anticipated to extend panel shipments by 1.5 to 2 occasions the quantity a 12 months earlier,” stated Kim Kwang-jin, an analyst at Yuanta Securities Korea.
LCD panel costs must also stay excessive within the first quarter, he stated. LG Display, which had beforehand stated it deliberate to halt home manufacturing of LCD TV panels by 2020, stated in an earnings name on Wednesday that will probably be versatile on home manufacturing primarily based on market circumstances this 12 months. An influence outage in Nippon Electric Glass’ (NEG) Japan-based glass manufacturing facility in December could have an effect on LG Display’s First-quarter shipments, as about 80% of its glass got here from NEGin the primary half of 2020, analysts stated.
But the decrease provide of large-sized glass may additional elevate panel costs within the first quarter, offsetting the affect of anyfall in shipments, they added. Revenue rose 16% to 7.5 trillion received, LG Display stated in a regulatory submitting. Its shares fell 5% on Wednesday in contrast with a 0.6% drop within the wider market, which analysts put all the way down to profit-taking. The inventory has nonetheless gained some 63% for the reason that begin of November.