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Flat-panel maker LG Display reported a record quarterly operating profit on Thursday, above market forecasts, as strong demand and raw material shortages boosted prices for TV and computer screens.
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Lee Jin-man / AP |
A seasonal slowdown will likely weigh on the highly cyclical sector's profits until the first quarter of next year, but analysts say the downturn would be milder than in previous years thanks to low inventory and expected supply control by makers.
LG Display, the world's No. 2 maker of liquid crystal display (LCD) screens, posted 904 billion won ($780.5 million) in operating profit in the third quarter to September, higher than a forecast of 893 billion won from Thomson Reuters I/B/E/S.
The result was more than triple the a year-earlier operating profit of 254 billion won and topped the previous record of 889 billion won set in the second quarter of 2008.
The company's EBITDA (earnings before interest, taxes, depreciation and amortization) margin jumped to 28 percent from 19 percent in the second quarter.
July-September net profit came in at 559 billion won, lower than a forecast of 798 billion won, but still a sharp improvement from 295 billion won in the year-earlier quarter.
Consolidated sales were at 5.97 trillion won, above a forecast of 5.85 trillion won and up 55 percent from a year earlier.
The LCD industry has managed to recover quickly from a severe slowdown in late 2008, riding largely on the popularity of flat-screen TVs, while a shortage of key glass input has sped a rebound in panel prices.
But LCD prices have trended down since late September on retreating demand.
LG Display, which competes with sector leader Samsung Electronics of South Korea and Taiwan's AU Optronics, expected its average LCD prices to fall "gradually" in the fourth quarter. Shipments in October-December will likely increase by a high single digit percentage from the third quarter, it said.
LG Display shares have fallen 10 percent since the end of August, lagging the wider market's gain of 4 percent due to concerns over weakening earnings momentum.
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