LG Display Co. ((LPL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for LG Display Co. presented a mixed sentiment for Q2 2025. While the company showcased significant improvements in areas such as operating loss, net income, and average selling price (ASP) per square meter, it also faced challenges with declining sales, operating profit loss, and reduced shipment areas. The strategic shift towards an OLED-centered business and enhancements in financial structure offer promising signs for future performance, yet the current challenges suggest a balanced outlook.
Improvement in Operating Loss
LG Display reported a substantial improvement in operating loss by KRW 480.5 billion in the first half of 2025 compared to the previous year. This positive change was primarily driven by the company’s strategic pivot towards an OLED-centered business, alongside cost reductions and enhanced operational efficiency.
Positive Net Income
The company turned its net income positive, reaching KRW 890.8 billion. This turnaround was attributed to improved foreign exchange gains and other non-operating income, notably the gain from the sale of the Guangzhou LCD plant.
Increase in ASP per Square Meter
There was a notable increase in ASP per square meter, which rose by 32% quarter-over-quarter to $1,056. This increase was largely due to LG Display’s exit from the LCD TV business and a strategic shift towards OLED technology.
Debt Ratio Improvement
LG Display’s financial health showed improvement with a decrease in the debt ratio by 40 percentage points quarter-over-quarter to 268%. Similarly, the net debt-to-equity ratio decreased by 19 percentage points to 155%, indicating better financial management.
Continued Growth in OLED Revenue
The OLED segment of LG Display’s revenue continued to grow, increasing by 1 percentage point quarter-over-quarter and 3 percentage points year-over-year, now comprising 56% of total revenue. This growth underscores the company’s successful transition towards OLED technology.
Decline in Sales
Sales for the quarter declined by 8% quarter-over-quarter to KRW 5.587 trillion, marking a 17% year-over-year decline. This was largely due to the seasonal off-peak period for smartphones and the termination of the LCD TV business.
Operating Profit Loss
LG Display posted an operating profit loss of KRW 116 billion, impacted by the stronger Korean won exchange rate and the cessation of the LCD TV business.
Decrease in Shipment Area
The shipment area decreased by 26% quarter-over-quarter, a direct consequence of the company’s exit from the LCD TV business.
Challenges in Mobile and IT Segments
Revenue from mobile and other segments declined by 6 percentage points quarter-over-quarter to 28%, reflecting seasonally weak panel shipments.
Forward-Looking Guidance
Looking ahead to Q3, LG Display anticipates a low to mid-single-digit percentage decline in shipment area due to changes in product mix and a reduction in low-margin medium panel products. However, the ASP per area is expected to increase to mid-20% levels, driven by a seasonal rise in shipments of small- and medium-sized OLED products. The company remains focused on its OLED-centered business strategy, aiming to enhance product quality and cost efficiency to bolster competitiveness and financial performance.
In conclusion, LG Display’s earnings call for Q2 2025 highlighted a mixed performance with both challenges and opportunities. The company’s strategic shift towards OLED technology and improved financial structure are promising, yet the current period’s challenges indicate a balanced outlook. Investors and stakeholders will be keenly watching how LG Display navigates these dynamics in the coming quarters.