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LG Electronics posts profit but misses market estimates in Q4

LG Electronics’ booth at CES 2024 [NEWS1]

LG Electronics posted 313.1 billion won in operating profit in the fourth quarter of last year, a 351.8 percent year-on-year jump, but missing the market expectation by a huge margin. The market forecast LG Electronics to log 639.5 billion won according to FnGuide.   Its revenue hit 23.1 trillion won, beating the market estimate of 22.9 trillion won.   For a full year, LG Electronics recorded its all-time high revenue of 84.2 trillion won in 2023, helped by its home appliances and vehicle solutions businesses. Its operating profit came to 3.5 trillion won, down by 0.1 percent year-on-year.   The Korean electronics company attributed the lower-than-expected profit for the fourth quarter to high marketing fees amid intensifying competition in the global home appliances market and one-off incentive payments. Of the four business divisions, the Vehicle component Solutions (VS) segment was the only division to post profit. It recorded 5.7 billion won in operating profit in the fourth quarter, an 81 percent drop from the previous year’s 30.2 billion won.   The Home Appliances & Air Solution (H&A) division turned to red, posting an operating loss of 115.6 billion won during the October-December period last year. “Material and logistic costs were maintained stably but marketing costs due to intensifying competition and incentive payment at the end of the year lead to a drop in profit compared to the previous year,” the company said.   The Home Entertainment (HE) division in charge of the TV business downsized its losses by 35.3 billion won by posting 72.2 billion won of operating loss during the cited period. “Demand for premium TVs, including the main OLED [organic light-emitting diode] TVs, was slow,” the company said.   The Business Solutions (BS) division in charge of gaming monitors and laptop businesses logged 89.5 billion won of operating loss.   LG Electronics plans to expand its B2B business such as air conditioning and heating systems in 2024. It also plans to transition its business portfolio toward more future-oriented areas such as XR (extended reality) headsets.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]

 

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