December 22, 2024

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[THE INVESTOR] LG Electronics will miss fourth-quarter earnings consensus, said Daishin Investment and Securities on Dec. 19 lowering the target price to 95,000 won (US$84.46) from 105,000 won while maintaining a “buy” recommendation. 

Its operating profit will come in at 291.1 billion won, significantly below market consensus, and revenue will decline 3.5 percent on-year to 16.4 trillion won. Its home entertainment division’s operating profit ratio declined further to 5.5 percent and costs increased to counter the aggressive marketing of rivals, said analyst Park Gang-ho, lowering the earnings per share for this year and next year by 7.7 percent and 3.6 percent, respectively. 

The slowdown of smartphone sales and growing fixed costs have weakened the mobile sector, even as affiliate LG Innotek’s revenue and profits are sliding. The electronics giant, however, will enter a conventional high season in the first half of 2019, said the analyst, forecasting that operating profit for the whole year will gain 6.6 percent from this year to 3.1 trillion won. 

By Hwang You-mee (glamazon@heraldcorp.com)