LG Display’s Sales Taking a Hit From Sluggish OLED TV Sales and iPhone 15 Pro Max Approval

LG is expected to fall short in third quarter of 2023 due to delays in panel approval from Apple and sluggish sales of OLED TVs. LG should be supplying the displays for both iPhone 15 Pro models but got approval from Apple for the ‌iPhone 15 Pro‌ while the ‌iPhone 15 Pro‌ Max approval was delayed and pushed into the fourth quarter. However, the company anticipates increased profits in the fourth quarter, with an optimistic outlook for 2024. According to analysis by NH Investment & Securities, the delay in the supply of smartphone panels to Apple may result in an operating loss estimated at 741.5 billion won ($552 million) for Q3’23. Despite this setback, the company agrees that an upturn in profits for the fourth quarter is likely, with iPhone Pro Max panel approvals. Demand for high-end smartphones, in general, remains robust, which is expected to bolster LG’s revenues.

Source: Apple

LG maintains that its mid to long-term profit growth strategy remains on track despite the hiccup with Apple. From the first half of 2024, earnings are expected to improve, driven by diversification of OLED TV clients and new shipments of OLED panels for tablets, you know, like the iPad Pro. Cost reduction measures are also cited as a significant factor for performance improvement. Another favorable development for LG is the scheduled end of depreciation for several of its production lines. Depreciation for the mobile OLED E6 line #1 is set to end in the second half of 2024, followed by E6 line #2 and the closure of the Guangzhou OLED TV line. The reduction in depreciation costs is anticipated to have a positive impact on earnings.