Securities analysts are coming up with differing forecasts for LG Electronics.
For example, Eugene Investment & Securities predicted on January 19 that the electronics manufacturer’s performance for the last quarter of 2013 will be higher than expected, thanks to its Home Entertainment (HE) Division. It estimated the consolidated operating profits at 231.6 billion won (US$217.7 million), 6% up from a quarter earlier.
“The earnings ratio of the HE Division has improved quarter-on-quarter, despite the fierce competition in the TV markets of advanced economies, because of the drop in panel prices and the strong euro,” analyst Yoon Hyeok-jin explained, continuing, “LG Electronics is sharpening its competitive edge in the smartphone industry as well, showing substantial growth in the global market dominated by Apple and Samsung Electronics.”
Meanwhile, HMC Investment & Securities suggested a target price of 77,000 won (US$72.30), adding that now is the time to lower expectations for LG Electronics. Researcher Roh Geun-chang estimated its consolidated sales and business profits for Q4 last year at 15.3 trillion won (US$14.4 billion) and 206.9 billion won (US$194.5 million), which are 1.5% and 27.5% higher than the previous forecasts, respectively. However, he predicted that the Mobile Communications (MC) Division would record a deficit of 35.6 billion won (US$33.4 million). “It is positive that LG Electronics is shoring up its marketing in Europe nowadays, but the company is unlikely to achieve meaningful results in the short term, as the demand for smartphones is declining there. Sony is regrouping itself and Nokia is supplying a huge quantity of low-priced phones in cooperation with Microsoft,” he added.