SEOUL -- South Korea’s LG Display Co Ltd forecast higher panel shipments and more stable prices in the second quarter as it reported its first operating loss in six years on Wednesday, hit by a flood of supply from Chinese rivals.
Sluggish sales of liquid crystal displays for TVs and investment costs of shifting production to meet growing demand for organic light-emitting diode (OLED) panels also weighed on earnings in the first quarter.
But CFO Don Kim said the second quarter was looking brighter, with panel area shipments expected to grow on-quarter as consumers upgraded to bigger screens to watch major sporting events.
LCD panel prices should stabilize while demand for large-size OLED panels was also expected to remain strong, he added.
“The market situation has changed more rapidly than expected,” he said in a statement.
“We will be focusing on efficient and flexible management in capital expenditure and maintaining operational performance including intensified cost reduction.”
The Apple Inc supplier posted an operating loss of 98 billion won ($91 million) for January-March. That compares with a 1 trillion won profit in the same period a year ago and an average forecast of a 58.1 billion won loss drawn from 14 analysts polled by Thomson Reuters.
Revenue fell 19.6 percent to 5.7 trillion won.
LG Display shares, which have been trading near three-month lows so far in April, had jumped about 1 percent by 0100 GMT compared with a 0.6 percent fall in the wider market.
“Investors are betting that this is the last bad result, and it can only go up from here,” said Kim Hyun-soo, analyst at Hana Financial Investment.
Chinese panel makers, bolstered by government subsidies, are ramping up production and putting pressure on panel prices, analysts have said.
Prices of key LCD panels are estimated to have fallen between 6 percent and 10 percent in the first quarter, they added.
Concerns about a glut in the market had driven LG Display shares down about 17 percent so far this year.