By Joyce Lee and Heekyong Yang
SEOUL (Reuters) -South Korean display panel maker LG Display Co said on Wednesday it swung to a second-quarter loss from a profit a year earlier, as inflation and interest rate hikes undercut demand for panels used in TVs and gadgets.
The Apple Inc (NASDAQ:AAPL) supplier said it expected only a limited recovery in panel shipments in the third quarter, due to weaker consumer confidence.
"As a downturn looms, consumption is expected to generally slow down except for essential goods," the company said in an earnings call.
"Set makers and retailers in general are becoming more conservative in their business operations."
The company's operating loss was 488 billion won ($371 million) for the April-June quarter, compared with a profit of 701 billion won in the same period last year. Business had been boosted for several quarters by strong home entertainment-related demand during the COVID-19 pandemic.
The quarterly operating loss, the first since the second quarter of 2020, was steeper than an average forecast of a 343 billion won loss from 12 analysts polled by Refinitiv SmartEstimate.
Revenue fell 20% on the year to 5.6 trillion won, LG Display said in a regulatory filing.
LG Display saw a decrease in panel shipments in the second quarter as China's prolonged COVID lockdowns disrupted supply chains, while demand in the industry generally was affected by increasing economic volatility and uncertainty.
Prices of 55-inch liquid crystal display (LCD) panels for TV sets fell about 12% in the April-June quarter compared with January-March, according to data from TrendForce's WitsView.
LG Display said it will accelerate its plan to reduce its LCD TV panel business, with a halt to LCD production in South Korea by next year, and concentrate more on high-end IT-related products.
LG Display shares closed up 0.3% after the earnings were announced, versus the wider market's 0.1% rise.
($1 = 1,313.6400 won)