TOKYO (Reuters) - Screen supplier Japan Display reported a stronger-than-expected rise in quarterly profit amid higher demand from Apple Inc and Chinese smartphone makers, in stark contrast with peer Sharp Corp’s shrinking panel business.
Japan Display said on Thursday operating profit for October-December climbed 80 percent from a year earlier to 14.7 billion yen (£80 million). Analysts on average had expected a profit of 14 billion yen, according to Thomson Reuters data.
Plagued by the intense competition from Asian rivals that has also hit Sharp, Japan Display had reported steep losses in the previous two quarters, before sales to Apple for the iPhone 6 kicked in. As a result, the Japanese firm still expects an operating loss of 6.5 billion yen for the year through March.
“During the third quarter, sales to a major Western customer grew 2.5 times the year-ago quarter,” Japan Display said in a statement, without naming Apple. While the Japanese firm doesn’t identify clients without their prior approval, Reuters and other media have reported Apple is a buyer of Japan Display screens, and Apple’s official list of its top 200 global suppliers for 2014 includes Japan Display.
“Shipment of smartphone displays to China also grew, as did sales of high-resolution models,” the company said. Last year fast-growing Xiaomi Inc identified itself as a Japan Display customer.
Japan Display has endured a rocky spell since its listing in Tokyo last year. Formed in a government-backed deal in 2012 from the ailing display units of Sony Corp, Toshiba Corp and Hitachi Ltd, its shares have fallen 45 percent from their market debut, closing at 418 yen on Thursday before the quarterly results were published.
Investors initially believed Japan Display was falling behind rival Sharp in building relationships with fast-growing Asian smartphone makers like Xiaomi. But Japan Display also began doing business with Xiaomi in the second quarter, and Sharp last week warned that it will slip into its third annual net loss in four years due to fierce pricing competition and slower sales.
Industry sources have said Japan Display has been cutting prices in an aggressive push to bolster sales.
But Chief Executive Officer Shuichi Otsuka told reporters in Tokyo on Thursday that he was competing on technology rather than pricing. Otsuka said he was hoping to attract more business by marketing the benefits of his firm’s “in-cell” displays - touch-screen panels that are easier to assemble than other types of screens.
Editing by Kenneth Maxwell