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LG Electronics

LG Electronics expects record Q3 results on brisk home appliance, TV sales

Oct 08, 2020 (Gmt+09:00)

LG Electronics Inc. expects its operating profit to rise to a quarterly record in the July-September period thanks to solid growth in its television and home appliance segments in the COVID-19 pandemic era.

The South Korean consumer electronics giant said on Oct. 8 its operating profit likely rose 23% on a year-on-year basis to 959 billion won ($829 million) in the third quarter.

Unveiling its third-quarter earnings guidance, the company said it expects sales to rise 7.8% to 16.92 trillion won.

LG didn’t provide net income or break down divisional performance, available later this month when it releases its final third-quarter results.

LG’s operating profit and sales estimates beat the market consensus by a large margin and, if confirmed, would be the company's best-ever results for any third quarter.


Shares of LG Electronics finished 2.9% lower at 93,300 won on Thursday as investors took profit from recent gains. The broader Kospi market closed up 0.2%.

The third quarter is traditionally an off-season for home appliances makers, meaning weak earnings for LG. But this year, longer periods at home and government subsidies to ease pandemic-caused economic difficulties are driving demand for home appliances and TVs, according to market analysts.

Robust sales of more profitable large-sized OLED TVs -- since LG’s OLED TV plant in Guangzhou, China began operations in July -- also contributed to the company’s stellar TV segment performance.

According to industry tracker Omdia, LG Electronics sold 290,000 units of OLED TVs in July and August, up 56% from the year-earlier period. The global OLED TV market is forecast to nearly double from 625,000 units in the first quarter of this year to 1.2 million units in the fourth quarter, Omdia said.

OLED TV produced by LG Electronics

NARROWING PHONE BUSINESS LOSS

LG’s struggling mobile business is also projected to have narrowed losses with increased smartphone sales, benefiting from US restrictions on Chinese tech firm Huawei Technologies Co. Analysts estimate LG’s third-quarter operating loss at 150 billion won, compared with a loss of 206.5 billion won in the second quarter and a shortfall of 161.2 billion won in the third quarter of last year.

LG Electronics is widely expected to report stronger results in the final quarter of this year, when demand for home appliances usually rises ahead of the year-end holiday season.

On Thursday, LG’s cross-town rival Samsung Electronic Co. also released surprise third-quarter earnings estimates

Samsung said its operating profit likely jumped nearly 60% to 12.3 trillion won ($10.6 billion won) in the three months to September on a rise in smartphone sales and US restrictions on Huawei Technologies.

Write to Su-Bin Lee at isb@hankyung.com

[Edited by In-Soo Nam]

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