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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] On the 4th, Meritz Securities projected that LG Electronics’ Q3 earnings will fall short of consensus expectations (market average forecasts).
Meritz Securities anticipates LG Electronics’ consolidated revenue for the third quarter of this year to be 21.8193 trillion won, a 5.4% increase compared to the previous year, while operating profit is expected to decrease by 5.7% to 967.5 billion won.
This performance is 5.7% below the consensus forecast for operating profit, which stands at 1.0264 trillion won.
The firm noted that excluding the performance of LG Innotek, which is included in the consolidated figures, the standalone results are in line with market expectations. They expressed optimism that, despite the challenging operating environment due to rising shipping costs, LG Electronics would record decent results driven by the growth of B2B new businesses and stable inventory management.
In particular, they highlighted that new businesses such as subscription-based appliances and WebOS, which LG Electronics has emphasized to overcome its existing corporate image and seasonal impacts, have achieved remarkable results.
Analyst Yang estimated that subscription-based appliances and WebOS will account for 14.1% and 75.3% of operating profit, respectively, within each business division this year, asserting, "There is no doubt that profitability will significantly improve with the growth of new business revenues in the future."
Furthermore, they forecast that this year will serve as a turning point for LG Electronics to improve its chronic issue of seasonal volatility.
Meritz Securities maintained a "Buy" rating on LG Electronics, with a target price of 140,000 won.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
