The Korea Herald


LG Electronics’ Q4 operating profit estimated to nose-dive 91%

By Jie Ye-eun

Published : Jan. 6, 2023 - 18:47

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LG Electronics' headquarters in Yeouido, western Seoul. (Yonhap) LG Electronics' headquarters in Yeouido, western Seoul. (Yonhap)

LG Electronics said Friday it expected its 2022 fourth-quarter operating earnings tumbled more than 91 percent from a year prior, amid its home appliance unit’s sluggish performance coupled with global recession woes.

LG estimated operating profit for the October-December period came in at 65.5 billion won ($51.6 million), down 91.2 percent from the same period a year before, according to the company’s earnings guidance.

It would be the first time in four years for South Korea’s No. 2 home appliances maker to report a quarterly operating income of less than 100 billion won since it logged 75.7 billion won in profit for the fourth quarter of 2018.

The figure was also much lower than the market consensus of 420.7 billion won.

Revenue is expected to have increased 5.2 percent on-year to 21.85 trillion won, still lower than the market consensus of 22.72 trillion won.

For the full year of 2022, the operating profit likely lost 12.6 percent on-year to 3.54 trillion won, but data for net profit was not yet available.

LG estimated its annual sales from last year to exceed 80 trillion won for the first time.

The figure likely reached 83.46 trillion won, up 12.9 percent from the previous year, earnings guidance data showed.

“Profits have worsened as global inflation intensified, but the estimations meet overall market expectations,” the officials said.

While details on each business sector’s estimated figures were not available for Friday’s earnings guidance, market watchers assumed its home entertainment unit had seen a massive deficit last year.

After reaching a bottom, the home appliances maker will likely recover starting this year, local analysts said. Once skyrocketing costs of logistics and raw materials stabilize, the firm will see an improvement in its profits, they added.

"LG Electronics' operating profit for the first quarter is estimated to reach 1 trillion won, driven by its profit growth centered on home appliances," said Kim Dong-won, an analyst at KB Securities.

The earnings guidance was released after the Seoul stock market had closed Friday. LG shares ended trading at 90,700 won on the same day, up 0.89 percent from the previous session's close.

The breakdown of financial results will be out on Jan. 27.