LG Display Rides Increased iPhone Shipments to Report Highest Quarterly Profit in Over Three Years

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South Korea’s LG Show reported its highest quarterly revenue in over three years on Wednesday, returning to the black for a second quarter in a row with assist from elevated shipments of Apple’s new iPhone fashions.

The Apple provider posted an working revenue of KRW 685 billion (roughly Rs. 4,500 crores) within the 2020 fourth quarter, in contrast with a lack of KRW 422 billion (roughly Rs. 2,800 crores) in the identical interval a yr earlier.

It was the show panel agency’s highest quarterly revenue because the second quarter of 2017, and soundly forward of market expectations for a KRW 286 billion (roughly Rs. 1,900 crores) revenue, based on a Refinitiv SmartEstimate derived from 12 analyst estimates.

“As the worldwide work-from-home state of affairs continued within the fourth quarter, demand for TV and IT merchandise remained sturdy,” LG Show mentioned in a press release.

Shipments and costs of natural light-emitting diode (OLED) panels rose for each TVs and smartphones, whereas the sturdy earnings have been helped by full-scale manufacturing at its Guangzhou OLED plant, the corporate mentioned.

Analysts highlighted elevated shipments of OLED panels for Apple’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 international customers caught at house because of the COVID-19 pandemic.

Apple’s iPhone shipments within the fourth quarter have been probably up 21 p.c on-year because of the sturdy efficiency of the iPhone 12, based on Counterpoint information.

Stronger iPhone gross sales ought to spill over into LG Show’s first quarter outcome, analysts mentioned.

“The primary half of the yr is normally a seasonal down-cycle, however this yr is completely different. It’ll proceed to swing to revenue, as iPhone 12 gross sales are anticipated to extend panel shipments by 1.5 to 2 instances the quantity a yr earlier,” mentioned Kim Kwang-jin, an analyst at Yuanta Securities Korea.

LCD panel costs also needs to stay excessive within the first quarter, he mentioned.

An influence outage in Nippon Electrical Glass’ (NEG) Japan-based glass manufacturing facility in December might have an effect on LG Show’s first-quarter shipments, as about 80 p.c of its glass got here from NEG within the first half of 2020, analysts mentioned.

However the decrease provide of large-sized glass might additional carry panel costs within the first quarter, offsetting the influence of any fall in shipments, they added.

Income rose 16 p.c to KRW 7.5 trillion (roughly Rs. 49,500 crores), LG Show mentioned in a regulatory submitting. Its shares fell 0.6 p.c by 01:16 GMT (6:46am IST) in contrast with a 0.9 p.c rise within the wider market, which analysts put all the way down to profit-taking.

© Thomson Reuters 2021


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