(2nd LD) LG Electronics estimates lower-than-expected Q2 operating profit

All News 16:26 July 07, 2017

(ATTN: ADDS details in para 8-11)
By Kang Yoon-seung

SEOUL, July 7 (Yonhap) -- LG Electronics Inc. said Friday its second-quarter operating profit is estimated at 664.1 billion won (US$574.5 million), posting a weaker-than-expected performance apparently on sluggish smartphone sales despite a robust performance of its home appliance business.

The operating profit for the April-June period marks a 13.6-percent jump from the 584.6 billion won posted a year earlier, South Korea's No. 2 tech giant said in a regulatory filing.

Sales came to 14.5 trillion won, also up 3.9 percent from a year earlier.

The operating profit estimate, however, fell short of the market's earlier expectation of 768 billion won, compiled by Yonhap Infomax, the financial news arm of Yonhap News Agency, on 21 South Korean brokerage houses.

LG did not announce the performance of each business division. The company is set to release the finalized earnings report later this month.

Analysts said while LG managed to post a strong performance for the home appliance business, the television segment's profitability fell due to the increasing price of panels.

The mobile business is also presumed to have remained weak on sluggish sales of the flagship G6 smartphone, analysts added.

Analysts said LG is estimated to have posted an operating loss of 100 billion won for the mobile business for the second quarter. The division posted an operating loss of 200 million won in the January-March period.

The TV business is predicted to have posted an operating profit of 310 billion won, falling from 357 billion won posted a year earlier.

The home appliance arm's operating profit is estimated at 440 billion won, remaining nearly unchanged from a quarter earlier, industry watchers said.

"The company's operating profit for the first half is estimated at 1.5 trillion won, which already hovers above 1.3 trillion won posted for all of 2016," an official from LG said, claiming the company's overall performance remains sound.

Shares of LG Electronics closed at 73,900 won on Friday, down 4.15 percent from the previous session. The second-quarter estimate was announced during the trading session.