LG Electronics Projects Quarterly Profit Drop, Missing Consensus — Update

By Kwanwoo Jun

LG Electronics forecast third-quarter operating profit to fall 21%, disappointing market watchers who had expected earnings would grow marginally.

The downbeat earnings guidance comes as the South Korean consumer-electronics giant is working to diversify its business model amid a slower-than-expected recovery in demand for televisions, consumer electronics and home appliances.

The company said Tuesday that its operating profit could come in at 751.10 billion won for the quarter ended September, equivalent to $558.1 million, compared with 950.10 billion won a year earlier.

That missed a FactSet-compiled consensus estimate of 1.024 trillion won.

Revenue is expected to have risen 11% to 22.177 trillion won, LG Electronics said, slightly below the FactSet-compiled consensus forecast.

LG Electronics didn't provide additional details in its preliminary earnings report. It is due to release full quarterly results later this month.

The company is striving to expand its corporate client base while exploring new business-to-consumer models, such as subscription services in the home-appliance market. It also seeks to keep growing its vehicle-component business on steady demand for in-vehicle infotainment products and safety-driving features.

Shares in LG Electronics fell 4.2% after the below-consensus preliminary earnings, taking losses this year to nearly 3%.

LG Corp., the holding company of South Korean conglomerate LG Group, said recently that it has set aside 200 billion won to raise its stake in LG Electronics over the next few months, a move some analysts said could help boost the stock.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

October 07, 2024 23:52 ET (03:52 GMT)

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