LG Electronics is expected to post 13.2 trillion won (down 6%) in sales and 359.7 billion won (up 22%) in operating profit for the third quarter on a consolidated basis.
LG’s Mobile Communications (MC) division is forecast to negatively affect third-quarter and fourth-quarter sales. NH Investment & Securities analyst Ko Jung-woo said, “LG’s MC division serves as a big variable in LG Electronics’ third-quarter results. Sluggish sales of LG smartphones persisted, widening the MC division’s deficit. The MC division is likely to continuously drag down LG’s consolidated revenue even in the fourth quarter.”
“Market expectations for a turnaround in the MC division’s business had been dashed for five consecutive quarters, from the second quarter of 2015 to the same quarter of 2016. As a result, market confidence in the MC division could drop even further.”
“The MC division’s poor performance is more of an LG Electronics-specific issue rather than a market issue. Therefore, forecasts for the MC division’s quarterly results need to be as conservative as possible,” Ko added.
