LG Display recorded a profit in the first quarter of this year, driven by an increased share of its OLED (organic light-emitting diode) business and the impact of high exchange rates. This is the first time LG Display has recorded a profit in the first quarter, a traditionally off-season period, in three years since 2022.
LG Display reported that its consolidated operating profit for the first quarter was 33.5 billion won, marking a turnaround from a loss of 469.4 billion won in the same period last year, according to a disclosure on the 24th. This performance significantly exceeded the securities consensus, which estimated an operating loss of 30.7 billion won, continuing the trend of profits for two consecutive quarters. Sales reached 6.653 trillion won, representing a 15% increase compared to the same period last year, though it decreased by 23% compared to the previous quarter.
The solid performance in the first quarter, which typically sees decreased demand for displays, is interpreted as a result of increased OLED shipments along with pre-orders made to prepare for the tariff policy and the effects of high exchange rates. Analysts suggest that many corporations sought to secure panel inventory in advance due to tariff impacts, leading to some of the second quarter's performance occurring earlier in the first quarter. Notably, shipments of OLED panels for TVs increased more than expected, and demand for OLED panels for smartphones also surpassed expectations. Consequently, the share of OLED products recorded a growth of 8 percentage points (P) to 55% compared to the same period last year.
A representative of LG Display noted, “TV manufacturers have been placing orders for panels in advance before tariffs are imposed, resulting in improved performance primarily in the large panel business, while orders for the mobile segment have also increased despite the off-season.” In terms of revenue, the sales ratio of products is 22% for TV panels, 35% for IT panels such as monitors, laptops, and tablets, 34% for mobile panels and other products, and 9% for automotive panels.
LG Display plans to enhance its business competitiveness centered around OLED, continuously pursue cost innovation and operational efficiency, and focus on maintaining a stable revenue structure. For its small-to-medium-sized business, the mobile OLED segment plans to expand shipments based on stable supply capabilities. The IT panel segment will solidify its leadership in high-performance tandem OLED technology and improve profitability by leveraging high-end LCD (liquid crystal display) technology. The large OLED business aims to expand differentiated products such as the fourth generation OLED TVs optimized for artificial intelligence (AI) and gaming monitors, while the automotive business plans to establish a stable revenue structure with a differentiated product and technology portfolio.
The company maintains a conservative stance on facility investments. Kim Seong-hyeon, Chief Financial Officer (CFO) of LG Display, stated during a conference call following the first quarter performance announcement, “We will utilize our current infrastructure to the fullest extent and execute investments cautiously, prioritizing profitability for any future new investments.”
Despite increasing market uncertainty due to the U.S.-led tariff policy, LG Display's performance outlook for this year remains bright. Predictions suggest that with the advancement of the OLED business structure and operational efficiency, the company is expected to turn an annual operating profit for the first time in four years. Kim So-won, a researcher at Kiwoom Securities, noted, “LG Display's annual operating profit is estimated to be around 675 billion won, indicating that this year could be the beginning of a performance turnaround,” and added, “The shipment of OLED panels is increasing across most product lines, including Apple iPhone panels, while the depreciation costs for production lines of mobile and TV panels are gradually decreasing, which is likely to solidify the operating profit structure.”
The sale price for the Guangzhou LCD factory sold to China's largest electronics company, TCL, has been finalized at 2.2466 trillion won, which is higher than initially expected, improving the company's financial stability. Kim, the CFO, stated, “A substantial portion of the sale proceeds is expected to be received in the first half of this year,” adding that “the funds secured will be utilized for urgent business needs and to secure future competitiveness.”
Regarding the impact of tariffs, he emphasized that its effect on the business would be limited. CFO Kim stated, “LG Display's products are rarely directly exported to the U.S.,” and that “we are closely monitoring how the production strategies of set manufacturers (customers), who are subject to tariff impacts, change, but as of now, we have found that there are no set manufacturers altering their strategies.”