LG Display recorded strong earnings for the fourth quarter ended December last year thanks to shift to larger-size panels, recovery in panel prices, demand for small- and medium-sized displays for mobile and wearable devices.

The company's revenues in the fourth quarter of 2016 increased by 18% to KRW 7,936 billion from KRW 6,724 billion in the third quarter of 2016 and increased by 6% from KRW 7,496 billion in the fourth quarter of 2015.

Operating profit in the fourth quarter of 2016 recorded KRW 904 billion, a quarter-on-quarter increase of 180% from the operating profit of KRW 323 billion in the third quarter of 2016, and a year-on-year increase of 1,392% from the operating profit of KRW 61 billion in the fourth quarter of 2015.

LG Display says it recorded its nineteenth straight quarterly operating profit as a result of a differentiated product strategy and the company's technologies despite fierce competition among display manufacturers.

With the growing trends for large-size panels as well as the rise in mid- and small-size panel shipments backed by seasonality, LG Display increased revenues by 18% quarter-on-quarter to KRW 7,936 billion. In addition, the company recorded all time high operating profit to KRW 904 billion up by 1,392 percent year-on-year from KRW 61 billion driven by differentiated and high value-added products such as large-size Ultra HD panels and in-TOUCH technology, as well as by the upward trend of panel prices and a favorable foreign exchange rate.

Panels for TVs accounted for 38% of the revenue in the fourth quarter of 2016, mobile devices for 31%, tablets and notebook PCs for 17%, and desktop monitors for 14%.

"Panel shipments in the first quarter of 2017 are expected to decrease by a mid-single digit percentage due to some production line conversions from LCD to OLED and capacity reduction from allocating some lines for new product R&D activities. In addition, since the demand in large-size panels continues to be strong backed by the growing trends towards large-size panels, the decrease of the panel shipment is expected to be a lot sharper," said Don Kim, CFO of LG Display. "The upwards trend of panel prices is anticipated to continue thanks to the low inventory level in the industry and the trends towards large-size panels."

He also added, "LG Display will strengthen its leadership in OLED from both the quantity and quality perspective this year, through enhancing our large-size OLED product portfolio which reflects the advantages of OLEDs such as picture quality, design flexibility, and embedded sound systems. In addition, we will transform ourselves to the OLED business by starting mass production at Gen 6 P-OLED production line later this year, producing mid- and small-size OLED panels. We will also continue to increase the portion of premium products, such as IPS and in-TOUCH technology. Through all these efforts, we will do our best to prepare for future growth and profit generation."

LG Display, which supplies screens for Apples iPhones and LG Electronics's TV sets, said earlier this month it was in talks with Samsung Electronics about a supply agreement for TV panels.