LG Display Rides Pandemic z2h34 Led Demand for TVs, Laptops to Beat Q2 Profit Estimates

Prices of LG Display's 55-inch LCD s for TV sets more than doubled in the April-June quarter. p4xj

By Reuters | Updated: 28 July 2021 12:10 IST

Photo Credit: Reuters 3v6d2p

LG Display reported an operating profit of KRW 701 (roughly Rs. 4,517) in the April-June quarter

Highlights

LG Display’s revenue rose 31 percent on-year to KRW 7 trillion
LG Display's stock has risen more than a fifth so far this year
Global chip shortage has affected Apple’s ability to sell its products

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South Korea's LG Display on Wednesday posted a better-than-expected second-quarter profit as pandemic-led demand for TVs and laptops drove up prices, pushing its shares up as much as 4.2 percent in morning trade.

The display maker, whose customers include Refinitiv SmartEstimate. Revenue rose 31 percent on-year to KRW 7 trillion (roughly Rs. 45,124 crores).

Prices of TrendForce's WitsView.

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Still, prices are slated to fall in the latter half of the year, as Chinese makers ramp up production on the back of a slight easing in the shortage of semiconductor parts, especially display driver integrated circuits (DDI), analysts said.

As well, vaccinated people around the world are venturing outdoors and watching less TV, prompting TV makers to take a conservative view on demand and lower procurement levels, analysts said.

"We are planning to operate our business on the assumption that IT prices might be partially mitigated and decline," Chief Financial Officer Suh Dong-hee told an earnings briefing, citing issues including competitors' production capacity and the parts supply situation.

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Market demand for LCD TVs was likely to decline more quickly than for IT devices, which would likely lead to weaker prices for LCD TVs, Suh said.

Apple on Tuesday said a global chip shortage that has bit into its ability to sell iPhone production and forecast slowing revenue growth.

Analysts said the global chip supply crunch has pushed up prices of consumer electronic gadgets, including laptops, TVs and smartphones as manufacturers adjust prices to reflect component cost increases in their pricing, however, prices were unlikely to continue to rise as the chip shortage is expected to ease in the second half of the year.

LG Display's stock has risen more than a fifth so far this year, versus a 12.5 percent rise in the broader market. The stock was up 2.2 percent in late morning trade.

Why did LG give up on its smartphone business? We discussed this on Orbital, the Gadgets 360 podcast. Later (starting at 22:00), we talk about the new co-op RPG shooter Outriders. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, and wherever you get your podcasts.

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