LG Electronics foresees a fall of earnings of 80% in the fourth quarter of the year

The operating profits of LG Electronics are predicted to fall by 80% compared to the same period last year, falling well below the expectations of analysts, the company announced.

The second largest television manufacturer in the world behind its compatriot Samsung, obtained an estimated profit of 75.3 billion won (about US $67 million) for the period between October and December last year, a figure much lower than the average of 387 billion won (about US $344 million) predicted by analysts.

This fall in earnings forecast by the company comes on the same day that Samsung estimates a 29% fall and a week after Apple revised its sales expectations for the first quarter of 2019.

LG’s revenue probably fell by 7% to 15.8 trillion won (US $14 billion), compared to the estimate of 16.3 trillion won (about US $14.5 billion) forecast by analysts.

Of course, LG has not revealed more details of the operations of the fourth quarter and will announce the full results at the end of the month. Analysts have pointed out that the probable causes go through the limited profit margins in their high-end TVs due to the great Asian competition, as well as the continued losses of its mobile division.

Despite this, analyst Lee Jae-yun of Yuanta Securities, explained to Reuters that the forecasts are “a surprise”, that yes “sales of household appliances were worse in emerging markets and China, while its television business high-end is not generating profits as before. ”

Analysts also said that earnings were probably reduced by higher year-end bonuses and marketing expenses for new devices.

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