LG Display crushed market analysts projections for its third-quarter operating income thanks to robust sales of its core products. The South Korean firm, a subsidiary of the LG Corporation, had lost money for six consecutive quarters before the last period.
The company also said it is adjusting its manufacturing operations based on how the coronavirus pandemic has affected its end-markets.
LG Display Q3 Resurgence
Despite being a leading manufacturer of liquid crystal displays (LCDs), the firm has struggled with profitability in recent years.
LG Display made ₩23.476 trillion ($20.7 billion) in revenue in 2019 but reported a loss of ₩1.359 trillion ($1.19 billion) for the year. But the manufacturer managed to reverse the trend in Q3 with operating income of ₩164 billion ($144.7 million) against sales of ₩6.738 trillion ($5.948 billion). By comparison, local industry insiders pegged the division’s earnings at ₩65 billion ($57.3 million).
The manufacturer attributed its Q3 resurgence to high sales of its mobile organic light-emitting diode (OLED) panels and televisions.
The firm, an Apple supplier, did not disclose the name of the customer that spiked its income last period. But Apple launched four different versions of its iPhone 12 available this month, so it is a likely suspect. The rollout of the 5G-enabled handset helped STMicroelectronics and Taiwanese Semiconductor Manufacturing Corporation (TSMC) grow their businesses in Q3 as well.
LG Display also enjoyed a boost in operating income thanks to COVID-19’s societal impact. Bored consumers, rendered homebound because of the pandemic, apparently bought a lot of new TVs last period.
Making Changes to Address the Post-Coronavirus Landscape
The manufacturer expects to see single-digit growth in Q4. The firm noted a rise in panel pricing and strong demand for its OLEDs should foster its growth in the current quarter. The company also anticipates doubling its LCD output in the second half of 2020 to accommodate demand.
LG Display is also making some changes to its business to address the effect of the coronavirus pandemic.
The corporation revealed it would re-task one of its South Korean LCD TV plants with making computer screens. The firm noted working from home, and shopping online has become more prevalent post-pandemic. For that reason, it wants to have new, cutting-edge displays ready for the “new normal” end-market.
The division’s leaders explained the change would enable it to pivot in response to future volatility.
Recently, the United States and Europe have experienced massive spikes in coronavirus cases. That development is making demand for consumer electronics considerably more unpredictable. But whatever happens next, LG Display’s strategy of prioritizing product diversity and operational flexibility is prudent.