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LG Electronics third-quarter profit down 3.7 percent year on year; mobile worries continue
October 7, 2016 / 6:14 AM / a year ago

LG Electronics third-quarter profit down 3.7 percent year on year; mobile worries continue

SEOUL (Reuters) - South Korea’s LG Electronics Inc said on Friday it expects third-quarter operating profit slipped 3.7 percent from a year earlier, as the consumer appliance and smartphone maker was likely hit by continued losses at its mobile division.

The LG company logo is seen following an event during the annual Consumer Electronics Show (CES ) in Las Vegas, Nevada January 6, 2014. REUTERS/Robert Galbraith

LG, the world’s second-largest TV maker behind domestic rival Samsung Electronics Co Ltd, said in a brief regulatory filing it expects July-September operating profit to be 283 billion won (204.33 million pounds). That’s below the year earlier’s 294 billion won, but above a Thomson Reuters StarMine SmartEstimate of 274 billion won from a poll of 10 analysts.

The firm didn’t offer details on its results and won’t release full earnings until the end of October. It had previously guided for its third-quarter operating profit to be higher than a year earlier.

Revenue for the period fell 5.8 percent to 13.2 trillion won, compared with a Thomson Reuters StarMine SmartEstimate of 13.6 trillion won.

Analysts said ahead of Friday’s filing that LG’s mobile division likely reported further losses during the quarter in the absence of new products to revive sales. Meanwhile its household appliances business could have been capped by weaker seasonal demand for air conditioners, they said.

While the global recall of Samsung’s Galaxy Note 7 smartphones may be an opportunity for rival manufacturers, analysts remain sceptical on whether LG can take advantage.

HMC Investment analyst Greg Roh said in a report issued before LG’s Friday filing that he expects the company to ship 700,000 of its new V20 smartphones, which launched in South Korea on Sept. 29 for 899,800 won ($810), during the fourth quarter. But Roh said the device was unlikely to halt the streak of losses for the business.

LG shares fell 0.4 percent on Friday, compared with a 0.6 percent fall for the broader market.

Reporting by Se Young Lee; Editing by Muralikumar Anantharaman and Kenneth Maxwell

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