LG Display Q2 net profit surges, faces slowdown ahead

By Rhee So-eui and Marie-France Han

SEOUL (Reuters) - South Korea's LG Display Co Ltd's (034220.KS) quarterly net profit more than trebled thanks to strong demand for flat screens, but future earnings will take a hit as the global economic downturn curbs consumer spending.

LG, which trails Samsung Electronics Co Ltd (005930.KS) in liquid crystal displays, said prices for its LCD screens are likely to fall by the low-teens in percentage terms next quarter, having slipped 5 percent in the last.

Analysts had expected a downturn to hit the sector at the end of the year, but they say that slowdown could come sooner and last longer.

"LG Display hit the peak this quarter but is expected to struggle until the first quarter of 2009," said Lee Sung-joon, an analyst for SK Securities, citing weak demand in China and the United States. "LCD panel prices have fallen from June... and the downturn trend will continue throughout this year."

Despite concerns about slowing demand and falling prices, LG Display said it will boost its spending plans for this year to 4.5 trillion won from 3 trillion as it tries to stay competitive.

Shares in LG Display, valued at around $12 billion on the market, fell more than 6 percent on Wednesday to their lowest in more than a year on a flurry of recent analyst downgrades.

Earlier this week, Lehman Brothers predicted monitor panel prices would drop by nearly 40 percent and TV screen prices by 30 percent through the first half of 2009.

LG Display (LPL.N) reported a 759 billion won ($738.3 million) net profit in the second quarter to June 30, in line with a forecast for 752 billion won from ten analysts surveyed by Reuters.