J
Jeff Causey
Guest
After a rough 2015, LG Electronics may be on the rebound financially based on new guidance it released today concerning first quarter results. For the first time ever, the company has released official earnings estimates prior to the actual publication of financial results, which may be a good sign of the company’s confidence that it has turned the corner. According to LG, first quarter profit of 505 billion won ($441M USD) will be the best quarter since the second quarter of 2014.
LG indicates in their announcement today that the forecast of 505 billion won in profit is well above financial analysts’ average forecast of 408 billion won ($356M USD). The improvement in quarterly profit appears to have been driven by appliance sales as well as falling prices for components used in the production of televisions, where LG sits as the number manufacturer globally.
LG Electronics did not provide much additional detail to their guidance. They did indicate that quarterly revenue was expected to be in the 13.4 trillion won ($11.7B USD) range which would be a decline of about 4.5% compared to the same period a year earlier. Despite the dropoff in revenue, LG appears to be poised to be able to make it up on lower operating costs and a favorable currency exchange environment.
For fans of LG mobile devices, the news was not quite as rosy. The mobile communications division is expected to report its third quarterly loss. Any struggles will be heightened by spending on marketing to promote the LG G5. Sales of the G5 will not have a big impact until second quarter financial results are available later this year. Analysts will be watching sales of the device closely to see if LG is able to turn things around for that division.
source: Reuters
Come comment on this article: LG expects first quarter profits to rise as part of rebound
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