LG Display reported an operating loss of 107.7 billion won on revenue of 5.6121 trillion won for Q2, the company disclosed on the 22nd, driven by a one-time voluntary retirement expense of 240 billion won. Excluding the restructuring charge, the display maker's core operating profit reached approximately 132 billion won, marking its first profitable first half in five years with cumulative H1 operating profit of 39 billion won on revenue of 11.1461 trillion won. The voluntary retirement program, which cost more than the market's initial 150 billion won estimate, is part of LG Display's broader fixed-cost reduction strategy as the company shifts toward a profitability-focused structure following years of capital expenditure exceeding 5–8 trillion won annually, now constrained to the mid-2 trillion won range.
LG Display Absorbs 240 Billion Won Voluntary Retirement Charge in Q2
The 240 billion won voluntary retirement expense, reflected entirely in Q2, exceeded the market consensus of approximately 150 billion won, according to iM Securities. SK Securities analyst Park Hyung-woo noted that the cost is a one-time charge concluding this quarter, with its benefits expected to flow into earnings improvement starting next quarter. The company's year-over-year operating profit improved by approximately 250 billion won when excluding the restructuring expense, driven by profitability in large-format OLED panels. Depreciation costs in Q2 declined by 190 billion won compared to the prior-year period, contributing to a significantly lower breakeven point, Park added.
Analysts Lower Target Prices While Citing Cost Structure Improvement
Following the earnings announcement, major brokerages including SK Securities, iM Securities, and Shinhan Investment & Securities cut their target prices for LG Display while maintaining focus on potential H2 recovery. Shinhan Investment & Securities maintained its 'Buy' rating but lowered its target price by 11% to 16,000 won. iM Securities adjusted its target to 14,000 won, and SK Securities set its target at 16,000 won. SK Securities' Park emphasized that annual capital expenditure has been reduced from the historical 5–8 trillion won range to the mid-2 trillion won level this year, and that stabilizing foreign exchange rates could lead to a sharp rebound in net income as foreign exchange losses narrow.
LG Display Guides Mid-Single-Digit Shipment Growth for Q3
LG Display provided Q3 guidance indicating shipment area growth in the mid-single digits and area-based average selling price (ASP) increases in the high teens on a year-over-year basis. iM Securities analyst Jeong Won-seok projected Q3 revenue of 6.8 trillion won and operating profit of 417 billion won, citing sustained OLED panel shipments for Apple's iPhone 18 series launching in H2. Jeong noted that while Samsung Display will exclusively supply foldable iPhone OLED panels, LG Display's supply share for the bar-type iPhone 18 models is expected to expand. Shinhan Investment & Securities analyst Park Hyun-woo highlighted that large-format panels including OLED TVs and monitors are driving shipment area growth even during the mobile off-season, with the share of monitors within large-format OLED panels expanding from the low 10% range last year to approximately 20% this year.
Memory Price Surge and Set Maker Cost Pressures Pose Demand Risks
Despite the positive H2 outlook, concerns over weakening demand persist due to rising memory semiconductor prices that have increased cost burdens for set makers. Jeong Won-seok of iM Securities acknowledged the demand slowdown concerns but noted that Apple is capitalizing on production disruptions among Chinese smartphone manufacturers to expand market share, which should support steady OLED panel shipment volumes for the iPhone 18. Shinhan Investment & Securities' Park Hyun-woo stated that expanding share within strategic customers and defending profitability through cost innovation are critical during this period of heightened IT and mobile demand uncertainty. Park assessed the company's Q3 guidance as "somewhat modest growth" compared to prior-year figures, underscoring the importance of execution amid a challenging demand environment.
FAQ
What caused LG Display's Q2 operating loss despite improving core profitability?
LG Display recorded a Q2 operating loss of 107.7 billion won due to a one-time voluntary retirement expense of 240 billion won. Excluding this charge, the company's actual operating profit was approximately 132 billion won, reflecting improved profitability in large-format OLED panels and reduced depreciation costs.
How did analysts adjust their outlook for LG Display after the Q2 results?
Shinhan Investment & Securities lowered its target price by 11% to 16,000 won while maintaining a 'Buy' rating. iM Securities set a target of 14,000 won, and SK Securities adjusted to 16,000 won. All three brokerages cited the voluntary retirement cost impact but emphasized the company's improved cost structure and potential H2 recovery driven by iPhone 18 panel shipments.
What is LG Display's guidance for Q3 performance?
LG Display guided Q3 shipment area growth in the mid-single digits and area-based average selling price increases in the high teens on a year-over-year basis. iM Securities projected Q3 revenue of 6.8 trillion won and operating profit of 417 billion won based on this guidance and expected OLED panel demand for Apple's iPhone 18 series.
