LG Display Co, the world's second-largest maker of liquid-crystal displays, yesterday projected profitability that beat analysts' estimates as a drop in panel prices eases and the company holds back spending.

Earnings before interest, taxes, depreciation and amortization will be a "low 20s" percentage of sales, compared with 23 percent in the third quarter, Chief Financial Officer James Jeong said at a briefing in Seoul yesterday. Analysts predicted 19 percent for the fourth quarter, based on the median of 14 estimates in a Bloomberg News survey.

LG Display predicted its panel price drops will slow after reducing spending by about 9 percent this year and joining rivals such as AU Optronics Corp in lowering production. The Seoul-based company yesterday posted third-quarter earnings that surpassed analysts' estimates, suggesting the cutback is helping ease an industry oversupply, according to Credit Suisse Group and UBS AG.

"There were some concerns about its profitability before the release, but third-quarter results were good," said Park Sehick, a Seoul-based fund manager at Hanwha Investment Trust Management Co, which manages US$995 million of equities, including LG Display. "Concerns about a global economic slowdown led some panel makers to be less aggressive in their capital spending, and I believe that will be good for the industry."

LG Display projected the oversupply will last until the first half of 2009, more optimistic than predictions by CLSA Ltd and JPMorgan Chase & Co for the glut to persist until the end of next year.

The company trimmed its planned spending for this year to 4.1 trillion won (US$3.4 billion) from 4.5 trillion won. Investment will fall further to between 1.5 trillion won and 2 trillion won next year, Jeong said.

The glut will force the world's five largest LCD makers to cut capital spending by 24 percent to US$14.7 billion in 2009, Citigroup Inc said last month.

We are not worried about profitability in the fourth quarter," Jeong said in Seoul. "We're aware of the global economic slowdown, but production cuts and lower spending should be a positive factor."