South Korea’s LG Show on Wednesday posted a better-than-expected second-quarter revenue as pandemic-led demand for TVs and laptops drove up panel costs, pushing its shares up as a lot as 4.2 p.c in morning commerce.
The show maker, whose clients embrace Apple, reported an working revenue of KRW 701 billion (roughly Rs. 4,517 crores) within the April-June quarter, beating a mean analyst forecast of KRW 599 billion (roughly Rs. 3,861 crores) from Refinitiv SmartEstimate. Income rose 31 p.c on-year to KRW 7 trillion (roughly Rs. 45,124 crores).
Costs of LG Show’s mainstay 55-inch liquid crystal show (LCD) panels for TV units greater than doubled within the April-June quarter from the identical interval a 12 months earlier, in response to market information from TrendForce’s WitsView.
Nonetheless, panel costs are slated to fall within the latter half of the 12 months, as Chinese language panel makers ramp up manufacturing on the again of a slight easing within the scarcity of semiconductor elements, particularly show driver built-in circuits (DDI), analysts mentioned.
As nicely, vaccinated folks world wide are venturing outside and watching much less TV, prompting TV makers to take a conservative view on demand and decrease panel procurement ranges, analysts mentioned.
“We’re planning to function our enterprise on the belief that IT panel costs is perhaps partially mitigated and decline,” Chief Monetary Officer Suh Dong-hee instructed an earnings briefing, citing points together with rivals’ panel manufacturing capability and the elements provide scenario.
Market demand for LCD TVs was more likely to decline extra shortly than for IT units, which might probably result in weaker panel costs for LCD TVs, Suh mentioned.
Analysts mentioned the worldwide chip provide crunch has pushed up costs of shopper digital devices, together with laptops, TVs and smartphones as producers regulate costs to replicate element price will increase of their pricing, nonetheless, costs had been unlikely to proceed to rise because the chip scarcity is anticipated to ease within the second half of the 12 months.
LG Show’s inventory has risen greater than a fifth to date this 12 months, versus a 12.5 p.c rise within the broader market. The inventory was up 2.2 p.c in late morning commerce.
© Thomson Reuters 2021
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