Flat-screen maker LG Display Co Ltd swung to a record loss in the fourth quarter, its first loss in seven quarters, and drew a sombre picture of the current period, predicting lower shipments and weak prices. Although a sizeable part of LG's loss was due to a $400 million price-fixing fine, its woes underscore the difficulties facing the (LCD) industry, which has seen steep price drops despite efforts to cut output to counter anaemic demand and oversupply.
Further losses are likely in the first half of 2009 as the deepening global slowdown discourages consumers from spending on flat-screen TVs, computers and other goods, analysts said. "LCD panel prices will hit bottom in the first quarter this year, and will see a rather fast recovery in the second quarter," said Kang Young-heum, an analyst at Daewoo Securities.
"But LG Display won't be able to turn profitable again until the third quarter of the year." LG Display said average panel prices dived 23 percent in the fourth quarter, while shipments grew a mere 5 percent. The world's second-biggest LCD maker reported on Friday a 684 billion won ($499 million) net loss for October-December, worse than a forecaa 645 billion won shortfall from eight analystsurveyed by Reuters.
It made net profits of 760 billion won a year earlier and 295 billion won in the third quarter of 2008. On an operating basis, it posted a loss of 288 billion won against a 869 billion won operating profit a year earlier. LG Display said shipments would fall by a low single digit percentage in the current quarter and price drops would be limited.
"In terms of profitability, the first quarter will be difficult," said chief financial officer James Jeong. "But earnings-wise we likely passed the worst in December." Jeong said LG's first-quarter operating losses would be at a similar level as the fourth quarter's and monthly operating profits were possible as early as March.