LG earnings weak amid slowdown in Apple orders
Quarterly earnings slumped to their lowest level since the company returned to profitability last year, according to Reuters.
LG Display's quarterly profit was hamstrung by a seasonal slowdown and decreased sales to Apple, Reuters reported today.
For its first quarter ending in March, LG took home an operating profit of 151 billion won ($135 million). That topped the average analyst's forecast of 147 billion won and proved a healthy rebound from the 211 billion won loss in the year-ago quarter. It also marked the company's fourth straight quarter in the black after seven straight quarterly losses.
However, earnings sunk 74 percent compared with its fourth quarter, the lowest level since LG's return to profitability. The dour quarter was blamed on a seasonal slowdown in demand and weaker sales to Apple, which accounts for around 30 percent of LG's revenue, according to analysts. LG supplies display screens for Apple's mobile devices.
Prior to the earnings announcement, analyst Jay Yoo with Korea Investment & Securities forecast that LG's display panel shipments for the iPhone 5 and the iPad 4 had dropped by 42 percent and 66 percent, respectively. Concerns have arisen over Apple's own earnings, which are scheduled to be reported on Tuesday.
The upcoming quarters should be kinder to LG as Apple refreshes its product line later this year and demand for mobile device screens rises, Reuters added. LG itself said it expects display panel shipments to grow anywhere from 5 percent to 10 percent this quarter over the first quarter.
Corrected at 8:05 a.m. PT to note that earnings are for the first quarter.