LG Display posted an increase in profits during the third quarter of the year, with the largest growth percentages coming from mobile and tablet display revenues. Operating profit in the third quarter of 2014 came in at KRW 474 billion, a quarter-on-quarter increase of 191 percent and a year-on-year increase of 22 percent.
Revenue in Q3 2014 increase by 9.5 percent from Q2, reaching KRW 6,547 billion from KRW 5,979 billion. However, income remained pretty much flat compared with Q3 2013, which came in at KRW 6,579 billion. Percentage wise, TFT-LCD panels for TVs, mobile devices, monitors, tablets, and notebook PCs accounted for 42, 19, 17, 12, and 10 percent of revenue respectively last quarter, compared with 42, 16, 21, 9, and 12 percent each in Q2.
However, we are most interested in how smartphone and tablet display shipments and revenue are doing. Using the above percentage and revenue figures we can calculate the revenue generated by each department.
Income for mobile and tablet displays continues to outpace the other market segments, with a 30 percent increase in mobile display revenues and a 22 percent increase in tablet revenues compared with last quarter. Monitor sales continue to decline in light of the slowing PC market, while TV, LG Display’s largest revenue stream, and notebook sales are growing steadily.
In terms of display shipments, LG Display sold a total of 9.65 million square meters of net display area last quarter, marking an increase of 3 percent QoQ. Therefore, most of LG’s profits appear to have come from increased prices. The average selling price per square meter of display has increased by 7 percent, according to LG, suggesting that shipment growth isn’t quite as fast as the revenue figures suggest. Even so, LG is managing to profit from increasing mobile shipments.
Combined with strong handset shipments this year and that its latest G3 flagship is expected to exceed the company’s expectations, LG is well placed to withstand the competition from cheap Chinese manufacturers that others are struggling with.
2014 looks set to be one of the best years yet for LG.