Apple display-maker Japan Display has just eked out its first quarterly profit in more than three years, Reuters reports. The firm made an $87.26 million net profit for the quarter. That’s compared to an almost $900 million loss in the same quarter last year.
The last time Japan Display recorded a net profit was in the October through December quarter way back in 2016. Since then, Apple has lent a hand to keep the display-maker — which once made the majority of Apple’s iPhone screens — afloat.
Japan Display’s biggest problem was its failure to adopt OLED display technology in a timely manner. Instead, it stuck with LCD screens. It was therefore left behind when Apple increasingly relied on OLED screens.
In its first profitable quarter in years, Japan Display was, Reuters notes, “boosted by the sale of its stake in organic light-emitting diode (OLED) panel affiliate JOLED.” This was as part of renegotiated debts as part of its bailout restructuring.
Japan Display and Apple
Apple has stuck with Japan Display throughout its rough patch. The display maker still owes Apple hundreds of millions of dollars for a smartphone display plant that was built four years ago. To assist the ailing company, Apple agreed to slow the pace of expected repayments. It has also been paying money it owes Japan Display in shorter increments to boost cash flow. Today’s Reuters report seemingly has an update on Japan Display’s relationship with Apple. It notes that:
“The display maker … said it would delay sales of production equipment at its main smartphone screen factory in central Japan to ‘an overseas customer’, which sources have said is Apple.
The transaction, originally scheduled for end-March, will be completed in July-September due to the coronavirus outbreak slowing administrative procedures, it said. Japan Display will receive $200 million, which would be used for repayment to the customer.”
Japan Display’s recent biggest change in fortune was a $1 billion investment from Japanese investment manager Ichigo Asset Management. This bailout has thrown Japan Display a much-needed lifeline.
What remains to be seen is whether Japan Display can turn one profitable quarter into a series of them. As noted, Japan Display hasn’t had a profitable quarter in more than three years. But it hasn’t had a profitable year in six years. Can 2020 change all that? We’ll have to wait and see.