LG may make lower-than-expected profits

LG may make lower-than-expected profits

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LG Electronics Inc is likely to make lower-than-expected operating profits in the first quarter which could be drop to 19 percent while its mobile business will losing more and competition in market become more tougher which would result in revenue that will be lesser than the estimates.

In the world’s TV set market LG is following Samsung Electronics Co Ltd as second-biggest maker of the TV sets and for January-March quarter, company has forecasted an operating profit of 899.6 billion won ($792.77 million) which was lower than operating profit of 1.1 trillion won a year earlier, but was above the average estimate of 808 billion won, according to a poll of 21 Refinitiv analysts.

Similarly, against the consensus for revenue of 15.3 trillion won, the company said that its revenue is likely to be dropped by 1.4 percent to 14.9 trillion won. Any further details regarding first-quarter operations were not disclosed by the South Korean firm, who said that full results will be announced later this month.

For seven quarters, LG is in red zone for its smartphone business losing for a long time whereas its TV business is also facing intensifying price competition in the markets globally which could possibly hurt earnings, analysts said.

Recently, in order to better compete with the Chinese rivals, who have quickly been catching up, LG’s competitor Samsung reduced prices of its TV products, said Park Sung-soon, an analyst at BNK Securities.

Prospective of LG’s smartphone business is still weak and it is likely to be going on making losses, as view the analysts.

According to a report from market tracker Counterpoint Research, during last year, 3 percent of the total global smartphone shipments were made by LG, who is also planning to release its 5G-enabled smartphone in the home country later this month.

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I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.

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