Getting Worse
LG Electronics is likely to post an operating loss in the fourth quarter of last year with its smartphone business making an over 400 billion won (US$340 million) loss.
In a regulatory filing, LG said its operating loss for the fourth quarter of last year is estimated at 35.3 billion won (US$29.6 million), even though the fourth-quarter sales are estimated at 14.7 trillion won (US$12.4 billion), up 1.5 percent from a year ago. LG Electronics’ recorded an operating profit of 348.9 billion won for the same quarter in 2015.
The company’s operating profit last year reached 1.34 trillion won (US$1.13 billion), 12.2 percent up from the previous year while its sales revenue recorded 55.37 trillion won (US$47.0 billion), a two percent decrease from a year earlier.
The home entertainment (HE) business unit running TV sales and the H&A business unit operating other home appliances are likely to show the operating profit of some 200 billion won (US$170 million), respectively, while MC business unit would record profit loss of around 400 billion won. (US$340 million).
“The profit loss of the mobile communication (MC) business unit is expected to become bigger while the profits of home entertainment business unit and H&A business unit are likely to decrease due to the price rise of LCD panels and sales promotion expenses in the end of the year,” said Gho Jung-woo, an analyst at NH Securities. He, however, forecast that the performances of vehicle component (VC) business unit would continue to improve due to expansion of parts supply to GM’s electric vehicle Volt models.