April 25, 2024

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[THE INVESTOR] South Korean tech giant LG Electronics will likely post an earnings surprise in the first half this year thanks to improved sales of home appliances and smartphones, according to market analysts on March 22.

Kim Dong-won, an analyst from KB Investment and Securities, forecast in his investment report that the company would reap 781.1 billion won (US$695.86 million) in operating profit -- the highest in nearly eight years -- during the first quarter this year, up 55 percent on-year.

The analyst also expected the firm would likely post robust profits in the following quarter.

“LG will see its operating profit increase 41 percent on-year to 821.5 billion won in the second quarter, the peak season for air conditioners and TVs,” Kim said.

He also attributed the sales growth of LG’s smartphones in global markets.

The analyst anticipated that the shipment volume of LG’s lower-end smartphones in South America and Middle East in the first quarter would increase 30 percent from the previous quarter.

The firm’s latest flagship G6 has seen strong sales so far in the Korean market.

Around 10,000 G6 units are reportedly being sold per day since its release on March 10 in Korea. Some market analysts forecast LG will be able to sell more than 6 million G6 units this year.

“LG will likely reduce the operating loss by more than 1 trillion won from the massive 1.2 trillion won in 2016,” Kim said.

The tech giant’s mobile business logged operating losses for the seventh consecutive quarter in October-December 2016. 

LG's shares rose 3.44 percent, ending 69,200 won on March 22.

By Kim Young-won (wone010@heraldcorp.com)