Home > Business > Industry

LG Electronics estimates Q3 profit at $557 million, down 21%

Published: 08 Oct. 2024, 11:43 Updated: 08 Oct. 2024, 17:29

JIN EUN-SOO
[email protected]

LG Electronics' Seoul office in Yeouido, western Seoul [NEWS1]

LG Electronics on Tuesday estimated its third-quarter operating profit to be 751.1 billion won ($556.9 million), a 20.9 percent year-on-year drop, missing the market estimate by a large margin.

The market estimated the company to log 1 trillion won of operating profit in the third quarter, according to FnGuide.

Sales increased 10.7 percent to 22.17 trillion won, logging the highest third-quarter sales to date. Net earnings were not available.

Revenue beat the market estimate of 21.8 trillion won.

The Korean electronics giant said the increased costs of logistics and marketing dragged down its profit for the quarter.

LG Electronics had warned of increased ocean freight charges by 58 percent in the conference call for its second quarter earnings earlier this year. It also forecast that the costs of advertising and marketing would go up due to competition.

Despite lower-than-expected earnings, the company said it is continuing to successfully shift its business model to business-to-business (B2B) from business-to-consumer models of the past.

“Sales in the B2B segment, which is less affected by market conditions, are continuously rising,” the company said in a release.

“In terms of profitability, the platform-based content business is growing at a fast pace and increasing its contribution to operating profit.”

It added that although its vehicle business is facing slowing demand due to the “EV chasm,” that won't affect its initial goal of securing 100 trillion won worth of deals.

The company will release its final earnings report later in the month.

Shares of LG Electronics closed at 98,000 won on Tuesday, experiencing a 5.5 percent drop compared to the previous trading day.

BY JIN EUN-SOO [[email protected]]