LG Display Co Ltd. (ADR) (NYSE:LPL) reports its best quarterly profit in more than four years, in an attempt to prevent a profit decline predicted earlier.
The South Korean display company reported an operating profit of nearly $689.73 million (774 billion won) for the first quarter. This is the strongest LG has made since the first quarter of 2011. Current accounting standards for the company started during this time. Thomson Reuters I/B/E/S poll’s 32 analysts had estimated a profit of 490 billion won for this time.
The South Korean based company is facing challenges as the western economy continues to deteriorate, hurting their sales. Even though markets in areas such as Brazil and Russia are termed as ‘emerging’ on its books, the weak currencies of these markets haven’t contributed much to their profits as well.
Investors and analysts had been worried that LG might cut their orders to improve the scenario. But this would also hurt their panel sales as well. According to data provided by Display Search, the prices of LG appliances such as TV, laptops ad monitors were significantly lower on April 20 than from April 7. During these two weeks, shares of LG also witnessed a low time.
CFO Don Kim admitted that the weak share performance of the South Korean company is a matter of concern for the firm’s earnings, during a post-earnings conference with analysts. While he also admitted that business conditions could be challenging in the second quarter, he was not concerned about a major oversupply problem.
LG Display Co Ltd. (ADR) (NYSE:LPL) had also mentioned that they expect their shipments to grow at a slow pace (low or mid single digit percentage) in the second quarter. It also predicted that the average selling price of its appliances in the broader markets should not likely change significantly during this period.
The company had attributed this rise in its sales to a stable demand for the TV panels in the market. Also, the firm had cut production costs by nearly 150 billion won, in comparison to the previous quarter.
