A woman walks by an electronic stock board of a securities firm in Tokyo, Thursday, Dec. 27, 2012. Asian markets have risen amid optimism that Japan’s new leaders will stimulate its sluggish economy. (AP Photo/Koji Sasahara)
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A woman walks by an electronic stock board of a securities firm in Tokyo, Thursday, Dec. 27, 2012. Asian markets have risen amid optimism that Japan’s new leaders will stimulate its sluggish economy. (AP Photo/Koji Sasahara)
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People walk by an electronic stock board of a securities firm in Tokyo, Thursday, Dec. 27, 2012. Asian markets have risen amid optimism that Japan’s new leaders will stimulate its sluggish economy. (AP Photo/Koji Sasahara)
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A businessman walks by an electronic stock board of a securities firm in Tokyo, Thursday, Dec. 27, 2012. Asian markets have risen amid optimism that Japan’s new leaders will stimulate its sluggish economy. (AP Photo/Koji Sasahara)
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FILE - In this Oct. 20, 2012 photo, people line up to enter a newly-opened Apple Store in Wangfujing shopping district in Beijing. Apple's profit surge halted in the latest quarter, as a flood of new products like the iPhone 5 meant high start-up costs for new production lines. Apple posted net income for the October to December quarter that was flat with the year before. It was the first time in years that Apple didn't post a double-digit earnings increase. (AP Photo/Andy Wong, File)
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Federal Trade Commission (FTC) Chairman Jon Leibowitz speaks during a news conference at FTC in Washington, Thursday, Jan. 3, 2013, to announce that Google is agreeing to license certain patents to mobile phone rivals and stop a practice of including snippets from other websites in its search results as part of a settlement to end a 19-month investigation in the search leader's business practices. ( AP Photo/Jose Luis Magana
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This Thursday, Jan. 3, 2013, photo shows a Google sign at the company's headquarters in Mountain View, Calif. Google is pledging to license hundreds of key patents to mobile computing rivals under more reasonable terms and to curb the use of snippets from other websites in Internet search results in a settlement that ends a high-profile antitrust probe. (AP Photo/Marcio Jose Sanchez)
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Federal Trade Commission (FTC) Chairman Jon Leibowitz gestures as he speaks during a news conference at FTC in Washington, Thursday, Jan. 3, 2013, to announce that Google is agreeing to license certain patents to mobile phone rivals and stop a practice of including snippets from other websites in its search results as part of a settlement to end a 19-month investigation in the search leader's business practices. ( AP Photo/Jose Luis Magana
LG Display posts profit but iPhone dims outlook
SEOUL, South Korea (AP) —
LG Display reported a $299 million profit for the fourth quarter Thursday thanks to mobile product launches by key customers including Apple Inc. but warned that earnings will decrease in the current quarter as demand for iPhones wanes.
The South Korean panel maker said its October-December net profit totaled 319.7 billion won ($299 million) compared with a loss of 6.3 billion won a year earlier when the European Union fined the company 215 million euros for price fixing. Sales rose 32 percent to 8.74 trillion won.
LG forecast a profit drop for the current quarter because it expects to ship fewer panels to TV makers and mobile device makers. In particular, shipments of panels for mobile phones and tablet computers will likely decline to 25 percent of total sales from 31 percent in the fourth quarter.
LG's financial performance has become closely linked with Apple, which is the world's second-largest smartphone supplier after Samsung Electronics Co. LG Display also makes TV panels but sluggish demand for TVs has made smartphones and tablets more crucial for its growth.
Apple accounted for two thirds of LG Display's total profit during the second and third quarters of 2012, Samsung Securities analyst MS Hwang said in a report.
Apple's earnings report Wednesday showed that its sales of iPhones, iPads and Mac computers were each 1 million units short of market expectations. The Cupertino, Calif.-based company also gave sales guidance that fell short of expectations.
Many brokerages have lowered LG Display's sales outlook and share price target recently, citing concerns about demand for Apple's iPhone. Analysts said an increase in iPad mini sales in lieu of other iPad models that use bigger screens will also reduce LG's profit.
James Jeong, LG Display's chief financial officer, said the panel industry, which has been suffering from oversupply and weak global demand for years, is not expected to make a big improvement for another year.
Jeong said LG Display will have almost no increase in its production capacity this year, underlining how the tech sector is still reluctant to increase investment in factories at a time of global economic uncertainty.
LG's fourth quarter profit fell short of the 352 billion won median forecast by analysts polled by FactSet.
Operating profit totaled 587.3 billion won, compared with a 154.7 billion won loss a year earlier.
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