While the tech world is riding on mixed bag numbers, with some companies making new highs and some looking dull, LG Display Co Ltd (LPL, Financial) is riding high on its numbers. The later half of 2014 has produced many surprises in the tech world. We have witnessed veteran players falling while startups and relatively new players have been making and breaking records.
We have also seen how the focus of the tech world has traveled from the developed western economies to the emerging economies and how the trend of buying has gone through a paradigm shift from counter sales to online sales. Among all these changes and activities, one company that has been able to draw the most out of the innovative offerings from the tech fraternity is LG. Let us take a closer look at how things panned out for the tech honcho.
Business movement
South Korea’s LG Display Co Ltd booked its highest quarterly profit in almost four years on Tuesday and created a new history, buoyed by firm demand for liquid crystal displays (LCD) from television makers and client Apple (AAPL, Financial). The display giant’s profit numbers have been able to meet the street expectations, and analysts are of the view that the world’s top LCD maker will likely see strong earnings growth this year as well, as the demand for high-end televisions is expected to see further upside with a lot of activity impending in the smart home segment as was displayed in the CES 2015.
Apple also reported record iPhone sales for the fiscal quarter which ended on December, 27, 2014 and plans to launch a new smart watch in April this year, which means further sales momentum for LG Display due to rise in demand from its premier client Apple.
Going by the recent reports by Display Search, the full year, global LCD shipments are likely to see an upside by about 7% to 251 million units as consumers upgrade to larger TVs.
Number game
LG Display said last Wednesday in a press release that their operating profits have doubled for the October-December period from what it was a year ago for the same period and stood at $580.14 million, slightly above the expected $577 million mark of mean profit estimate tipped by a Thomson Reuters I/B/E/S poll of 36 analysts.
The profit numbers in the last quarter created a new milestone for the display honcho by making a new high since the January to March quarter of 2011, the earliest quarter for which LG Display’s current accounting standard applies.
The company spokesperson also said that “it would pay a year end - 2014 dividend of $0.5 per share, its first such payout in the last four years.
Going by the previous management guidance of LG Display it had forecasted a single digit percentage of shipment volume growth and a more stable price in the October to December quarter of 2014 than the previous quarter of the same year.
Currently shares of LG are trading in the negative by 0.2% but they are expected to see further upside in the short to medium term and analysts are quite bullish in their bottom line expectations through 2015.
Conclusion
With the prices trading at attractive levels it would be prudent as investors to buy stakes in the display giant at current prices to reap the benefits in the near term. As the order book of the display maker is about to see a surge from mid-2015 through 2016 as the smart homes concepts displayed at this year’s CES starts taking practical shape and gets rolled out globally. We would suggest the stocks of LG Display Co Ltd. a must buy.
