LG says Q1 operating profits may fall 18.8%

1.4%

Decline in LG’s sales in Q1 from a year earlier

seoul — LG Electronics has said its first quarter operating profits are expected to drop 18.8 per cent from a year earlier, mainly due to its sluggish smartphone business.

In an earnings guidance, the South Korean electronics major said it expects to post 899.6 billion won ($791.8 million) in operating profits in the January-March period — above the average market expectation of around 800 billion won. Its sales are expected to be 14.9 trillion won in the first three months of 2019, sliding 1.4 per cent from a year ago, the firm said.

The company did not provide detailed performances for each division, saying it will release its earnings report later in April, Yonhap news agency reported.

The operating profit in the preliminary earnings report was up more than 11 times from the previous quarter figure and the company’s second-highest quarterly record.

Market watchers say the strong demand for home appliances was expected to have improved its profitability, offsetting losses from the sluggish mobile business.

In the wake of the worst bout of fine dust in South Korea this year, LG Electronics posted brisk sales of products related to air quality, such as air purifiers, dryers and clothing-care home appliances.

Sales from its home appliance rental service have also been on the rise as more people opt for renting gadgets to save money on purchases, installations and maintenance.

Analysts estimated LG posted over 200 billion won in operating losses from its mobile business in the first quarter, extending losses from a year ago and marking the eighth consecutive quarterly deficit.