LG Display's Comeback: OLED Drives Surprising Profit Turnaround
Portfolio Pulse from Anusuya Lahiri
LG Display Co, Ltd (NYSE:LPL) reported a surprising profit turnaround in Q4 FY23 with a 1% revenue growth to KRW 7.4 trillion, driven by increased OLED panel shipments. The company returned to profitability after seven quarters, with OLED products contributing 57% to revenues. Gross margin improved to 11.7%, and operating income reached KRW 132 billion, a significant recovery from the previous year's loss. Net income was KRW 51 billion, and EBITDA surged 509% Y/Y. LG Display supplies screens for Apple Inc's (NASDAQ:AAPL) new Vision Pro headset and is expected to increase LCD panel supply to Samsung Electronics (OTC:SSNLF). The company plans to reduce 2024 investment to KRW 2 trillion to enhance financial stability. LPL shares rose 4.44% to $5.17.
January 24, 2024 | 12:30 pm
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POSITIVE IMPACT
LG Display supplies screens for Apple's new Vision Pro headset, which is expected to start sales next month, potentially increasing demand for LG's OLED panels.
The association with Apple's new product launch could lead to increased demand for LG Display's OLED panels, which may have a positive impact on AAPL's supply chain and product offerings.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
LG Display reported a return to profitability in Q4 FY23, with significant growth in OLED panel shipments and a positive outlook despite market volatility. The company also plans to reduce capital expenditure in 2024.
The positive earnings report and return to profitability after seven quarters are likely to instill investor confidence and could lead to a short-term increase in stock price. The commitment to reducing investment to improve financial soundness may also be viewed positively by the market.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Analysts expect LG Display to boost the supply of LCD panels for Samsung Electronics TVs this year, which could benefit both companies.
The expected increase in LCD panel supply to Samsung Electronics could signify a stronger business relationship and potential revenue growth for LG Display, which may indirectly benefit Samsung's product line.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60