LGD and Innotek's Disappointing Q3 Performance... Apple Effect Expected in Q4

LG Display and LG Innotek, electronic component affiliates of LG Group, announced disappointing third-quarter results that failed to fully reflect the iPhone 15 effect from their major client Apple. Performance improvement is expected to become more evident in the fourth quarter when the Apple effect takes hold.

On the 25th, LG Display reported third-quarter operating results with sales of 4.7853 trillion KRW and an operating loss of 662.1 billion KRW. Although sales decreased by 29.33% compared to the third quarter of last year, the deficit was reduced by 12.80%. The delayed recovery in demand for TV and IT products and ongoing inventory adjustments in the upstream industry continued, but continuous cost innovation helped reduce the loss margin.

The delay in supplying organic light-emitting diode (OLED) panels used in the iPhone 15 resulted in the sales proportion of IT panels (monitors, notebook PCs, tablets, etc.) dropping to 40%, lower than in the third quarter of last year, which remains a regrettable point. However, the effect of the delayed supply is expected to be reflected in the fourth quarter. Kim Sung-hyun, LG Display CFO, said in a conference call, "It is true that there were production disruptions as perceived by the market, but we have overcome them well," adding, "In the fourth quarter, we will make the most of the expanded capacity to overcome the delayed parts." He further stated, "As panel inventory adjustments in the upstream industry ease and shipments of medium-to-large products and new mobile product panels increase to meet year-end peak demand, we expect to return to profitability in the fourth quarter."

LG Innotek also announced weak third-quarter results with sales of 4.7636 trillion KRW and operating profit of 183.4 billion KRW due to the global economic downturn and sluggish IT product demand. Operating profit decreased by 58.8% compared to the same period last year. Amid weak smartphone demand, the expansion of component supply for major client new models was also hit, causing optical solution business sales to fall 12% to 3.9066 trillion KRW.

However, the automotive components business recorded sales of 412 billion KRW, up 8% year-on-year and 6% quarter-on-quarter. Sales increased as supply expanded mainly for electric vehicle and autonomous driving parts such as vehicle lighting modules and BMS. LG Innotek stated, "In the fourth quarter, performance is expected to improve as component supply for new client models is concentrated."

This content was produced with the assistance of AI translation services.