TOKYO (Reuters) - Japan Display Inc (6740.T) on Wednesday reported a deeper loss for the three months through September as its late entry into organic light-emitting diode (OLED) technology resulted in fewer orders from Apple Inc (AAPL.O) and Chinese smartphone vendors.
The company, money-losing for the past three years, has been earning half its revenue selling liquid crystal displays (LCDs) to Apple. But for the just-released iPhone X, the North American firm shifted to OLED panels which are only mass produced for smartphones by Samsung Electronics Co Ltd (005930.KS).
Japan Display will begin making smartphone OLED panels in 2019, by which time several rivals who began OLED investment earlier are widely expected to have started production.
Business with “a North American customer” is likely to be “tough” in coming quarters, Chief Financial Officer Takanobu Oshima said at an earnings briefing, without identifying the customer.
The company did not disclose a full-year earnings outlook, only saying annual revenue was likely to fall 15 to 25 percent due to a shift to OLED displays by “major customers”.
To catch up in OLED technology, Japan Display is seeking capital from new investors and has begun talks with “multiple companies”, Oshima said. The firm has previously said it is open to partnerships with rivals, including panel makers in China.
“We want partners who correctly value our technologies, who are willing to pay for them and can build win-win relationships with us,” Oshima said.
Japan Display posted a net loss of 36.6 billion yen ($321.53 million) for its second financial quarter, versus a year-earlier loss of 4.9 billion yen, partly due to a decline in LCD prices as smartphone vendors in China also shifted to OLED displays.
The result compared with a Thomson Reuters I/B/E/S Estimate of a 60.4 billion yen loss drawn from the views of five analysts, many of whom expected Japan Display to book previously flagged restructuring costs during the quarter.
The firm in August said it would shut down production lines and reduce its workforce by 30 percent, resulting in a special loss of 170 billion yen for the financial year ending March.
Reporting by Makiko YamazakiEditing by Christopher Cushing