LG Display (NYSE:LPL) Q3 2025 Earnings Call October 30, 2025 01:00 AM ET Company ParticipantsPark Sanghee - VP of Small Display Planning and ManagementHoseok - Investor Relations Team LeaderNone - Company RepresentativeKim Yong Duck - VP of Large Display Planning and ManagementCho Seung-Hyun - VP of Business Control and ManagementHong-jae Shin - Medium Display Planning and ManagementKim Sunghyun - CFOConference Call ParticipantsKim Sung-hoon - AnalystWonSuk Chung - AnalystMinkyu Kwon - AnalystCango Park - A ...

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was KRW 6.957 trillion, up 25% QoQ and 2% YoY [4] - Operating profit reached KRW 431 billion, improving by over KRW 500 billion QoQ and YoY [4] - Net income was KRW 1.2 billion, influenced by foreign currency translation gains [5] - EBITDA in Q3 was KRW 1.4239 trillion with an EBITDA margin of 20% [5] - Cash and cash equivalents stood at KRW 1.555 trillion, largely unchanged QoQ [7] - Debt-to-equity ratio was 263%, down 5 percentage points QoQ [7] Business Line Data and Key Metrics Changes - Mobile and others segment revenue share reached 39%, up 11 percentage points QoQ [6] - The share of OLED products out of total revenue was 65%, up 9 percentage points QoQ [6] - TV segment revenue share was 16%, down 4 percentage points QoQ [6] - Auto segment's share was 8%, down 2 percentage points QoQ [6] Market Data and Key Metrics Changes - Area shipment fell 1% QoQ despite growing shipments of small and medium OLED products [5] - ASP per square meter was $1,365, up 29% QoQ [5] - Total area shipment is projected to grow in low single-digit percentage QoQ for Q4 [8] Company Strategy and Development Direction - The company is focusing on an OLED-centered business structure upgrade and cost innovation [10] - Plans to ensure stable operations in the small mobile business by expanding panel shipments [12] - In the IT LCD business, the focus is on reducing low-margin products while enhancing high-end segments [14] - The company aims to solidify its leadership in the premium market for large panels [15] Management's Comments on Operating Environment and Future Outlook - Management expects external uncertainties and shipment volatility to persist in Q4 [11] - The company plans to address challenges by prioritizing business efficiency initiatives [11] - OLED products revenue share is expected to remain stable QoQ in Q4 [11] Other Important Information - The company plans an additional workforce improvement program in Q4 as part of cost innovation efforts [11] - CapEx for this year is expected to be in the high KRW 1 trillion range, below last year's level [15] Q&A Session Summary Question: Sustainability of Business Performance and Market Outlook - The company believes it has the structure to sustain business performance and expects to improve profitability by another KRW 1 trillion this year [20][21] Question: Response to ASP Pressure and Future Growth Strategy - The company will maintain an optimum pricing strategy while upgrading product mix and continuing cost innovation [22] Question: Market Reception of New Models and Shipment Outlook - The company has seen positive reception for new models and expects to further expand performance from last year [27][28] Question: Strategy for Foldable Smartphone Panel Business - The company is preparing for potential market growth and maximizing supply volume for existing products [34] Question: LCD IT Business Strategy - The company is focused on maintaining profitability by downsizing low-margin models and enhancing high-end lineups [39] Question: OLED TV Business Strategy - The company projects a mid 6 million unit level of large OLED panel shipment this year, expecting growth to 7 million units next year [44]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was KRW 6.957 trillion, up 25% QoQ and 2% YoY [3] - Operating profit reached KRW 431 billion, improving by over KRW 500 billion QoQ and YoY [3] - Net income was KRW 1.2 billion, influenced by foreign currency translation gains [4] - EBITDA in Q3 was KRW 1.4239 trillion with an EBITDA margin of 20% [4] - Cash and cash equivalents stood at KRW 1.555 trillion, largely unchanged QoQ [6] - Debt-to-equity ratio was 263%, down 5 percentage points QoQ [6] Business Line Data and Key Metrics Changes - Mobile and others segment revenue share reached 39%, up 11 percentage points QoQ [5] - The TV segment's revenue share was 16%, down 4 percentage points QoQ [5] - The auto segment's share was 8%, down 2 percentage points QoQ [5] - OLED products accounted for 65% of total revenue, up 9 percentage points QoQ [5] Market Data and Key Metrics Changes - Area shipment fell 1% QoQ despite growing shipments of small and medium OLED products [4] - ASP per square meter was $1,365, up 29% QoQ [4] - Total area shipment is projected to grow in low single-digit percentage QoQ for Q4 [7] Company Strategy and Development Direction - The company is focusing on an OLED-centric business structure and cost innovation to enhance profitability [8] - Plans to expand panel shipments in the small mobile business and invest in new technologies for IT OLED [10] - The company aims to solidify its leadership in the premium market with a diverse lineup of OLED panels [11] - Continuous growth in the auto segment is expected due to expanding in-vehicle display adoption [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges external uncertainties and competition but remains optimistic about improving profitability [9] - The company plans to address challenges by prioritizing business efficiency initiatives [9] - Expectations for stable performance in the OLED market despite macro uncertainties [17] Other Important Information - A workforce improvement program is planned for Q4, expected to have a more significant impact on financial performance than the previous quarter [9] - The company is maintaining a cautious approach to capital expenditures, focusing on future preparedness [12] Q&A Session Summary Question: Sustainability of Business Performance - Management believes the company has the structure to sustain performance and anticipates a change in the OLED market dynamics [15][16] Question: Response to ASP Pressure - The company will maintain an optimum pricing strategy while upgrading product mix and continuing cost innovation [18] Question: Market Reception of New Models - The reception for new models is generally positive, with potential adjustments in shipment plans based on market trends [21][22] Question: Strategy for Foldable Smartphone Panels - The company is preparing for potential market growth in foldable smartphones while maximizing supply volume for existing products [26][27] Question: LCD IT Business Strategy - The company is focused on high-end LCD technologies and maintaining profitability while downsizing low-margin models [30][31] Question: OLED TV Business Strategy - The company projects growth in OLED panel shipments and aims to strengthen competitiveness through cost innovation [34][35]

Financial Performance - Revenues increased to KRW 6,957 billion, a 2% increase compared to the previous year (Q3'24) and a 25% increase compared to the previous quarter (Q2'25) [4, 14] - Operating income turned positive to KRW 431 billion, compared to a loss of KRW 81 billion in Q3'24 and a loss of KRW 116 billion in Q2'25 [4, 14] - EBITDA increased to KRW 1,424 billion, a 23% increase compared to Q2'25 and a 35% increase compared to Q3'24 [4, 14] - Net income turned positive to KRW 1 billion, compared to a loss of KRW 338 billion in Q3'24 and a profit of KRW 891 billion in Q2'25 [4, 14] Shipment and Pricing - Area shipment decreased slightly by 1% QoQ to 3.9 Mm2 [8] - ASP (Average Selling Price) per m2 increased significantly by 29% QoQ to USD 1,365 [8] Financial Position - Cash and cash equivalents decreased to KRW 1,550 billion [11] - Liabilities to Equity Ratio decreased to 263% [11] - Net Debt to Equity Ratio decreased to 151% [11] Cash Flow - Cash flow from operating activities was KRW 672 billion [11] - Cash flow from investing activities was negative KRW 484 billion [11] - Net change in cash was negative KRW 117 billion [11] Product Revenue Mix - OLED portion of product revenue mix is 39% [10]

Core Insights - Investors in the Computer - Peripheral Equipment sector may consider LG Display (LPL) and Logitech (LOGI) for potential value opportunities [1] Group 1: Zacks Rank and Earnings Outlook - LG Display has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Logitech has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank emphasizes stocks with positive revisions to earnings estimates, suggesting LPL has an improving earnings outlook [3] Group 2: Valuation Metrics - LPL has a forward P/E ratio of 6.92, significantly lower than LOGI's forward P/E of 22.10 [5] - LPL's PEG ratio is 0.26, while LOGI's PEG ratio is 3.52, indicating LPL may be undervalued relative to its expected EPS growth [5] - LPL's P/B ratio is 0.93, compared to LOGI's P/B of 8.05, further highlighting LPL's relative valuation advantage [6] Group 3: Value Grades - LPL has earned a Value grade of A, while LOGI has a Value grade of C, suggesting LPL is more attractive to value investors [6]

Core Viewpoint - The article emphasizes the importance of value investing and highlights LG Display Co. (LPL) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][4][6] Company Overview - LG Display Co. (LPL) currently holds a Zacks Rank of 2 (Buy) and an A grade in the Value category, indicating strong potential for value investors [4][6] - The stock is trading at a P/E ratio of 15.18, significantly lower than the industry average P/E of 20.28, suggesting it may be undervalued [4] - Over the past 12 months, LPL's Forward P/E has fluctuated between a high of 27.19 and a low of -27.00, with a median of 12.93 [4] Valuation Metrics - LPL has a PEG ratio of 0.56, which is lower than the industry's average PEG of 0.85, indicating that LPL may offer better value relative to its expected earnings growth [5] - The PEG ratio for LPL has ranged from a high of 1.01 to a low of -0.48 over the last 12 months, with a median of 0.67 [5] Investment Outlook - The combination of LPL's favorable valuation metrics and strong earnings outlook positions it as one of the strongest value stocks in the market currently [6]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing - Momentum investors often face challenges in determining the right entry point, as stocks can lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify these opportunities [3] Group 2: LG Display (LPL) Analysis - LG Display has shown a price increase of 2.2% over the past four weeks, indicating growing investor interest [4] - The stock has gained 47.8% over the past 12 weeks, with a beta of 1.49, suggesting it moves 49% more than the market [5] - LPL has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - LPL is trading at a Price-to-Sales ratio of 0.27, suggesting it is undervalued at 27 cents for each dollar of sales [7] Group 3: Investment Opportunities - LPL is identified as a strong candidate for investment, with potential for further price appreciation [8] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, providing more investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [9]

Core Viewpoint - LG Display has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with stock price movements [4][6]. - For LG Display, the recent upgrade signifies an improvement in the company's underlying business, likely leading to increased stock prices due to investor confidence [5][10]. Earnings Estimate Revisions - LG Display is projected to earn $0.68 per share for the fiscal year ending December 2025, showing no year-over-year change [8]. - Over the past three months, the Zacks Consensus Estimate for LG Display has surged by 172%, indicating a significant upward revision in earnings expectations [8]. Zacks Rating System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating [9][10]. - The upgrade of LG Display to a Zacks Rank 2 places it among the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - Investors are evaluating LG Display (LPL) and Logitech (LOGI) for potential undervalued stock opportunities, with LPL appearing to be the superior option based on valuation metrics [1][6]. Group 1: Company Overview - Both LG Display and Logitech currently hold a Zacks Rank of 2 (Buy), indicating positive revisions to their earnings estimates and improving earnings outlooks [3]. - The Zacks Rank system emphasizes earnings estimates and revisions, which are critical for value investors [2]. Group 2: Valuation Metrics - LPL has a forward P/E ratio of 8.06, significantly lower than LOGI's forward P/E of 21.69, suggesting LPL is more undervalued [5]. - LPL's PEG ratio is 0.30, while LOGI's PEG ratio stands at 3.45, indicating LPL's expected earnings growth is more favorable relative to its price [5]. - LPL's P/B ratio is 1.03, compared to LOGI's P/B of 7.9, further supporting LPL's position as a more attractive value stock [6]. - Based on these valuation metrics, LPL earns a Value grade of A, while LOGI receives a Value grade of C, reinforcing the conclusion that LPL is the better value option [6].

Core Viewpoint - The article emphasizes the importance of value investing as a successful strategy across various market conditions, highlighting the use of fundamental analysis to identify undervalued companies. Group 1: Value Investing Strategy - Value investing is a popular stock market trend that focuses on identifying companies believed to be undervalued based on fundamental metrics [2] - The Zacks Rank and Style Scores system can help investors find stocks with specific traits, particularly those with high value grades [3] Group 2: LG Display Co. (LPL) Analysis - LG Display Co. (LPL) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential as a value stock [4] - LPL's Forward P/E ratio is 15.18, significantly lower than the industry average of 20.63, suggesting it may be undervalued [4] - The company has a PEG ratio of 0.56, compared to the industry average of 0.86, indicating favorable earnings growth expectations [5] - LPL's P/S ratio stands at 0.29, well below the industry's average of 0.84, further supporting the notion of undervaluation [6] - Overall, the combination of these metrics suggests that LPL is currently an impressive value stock with a strong earnings outlook [7]