LG Electronics assessed its operating earnings for the fourth quarter at 65.5 billion won ($51.6 million), a decrease of 91.2 percent from the same period last year.
Revenue increased 5.2 percent on-year to 21.85 trillion won, marking a quarterly high, according to the earnings guidance released by the company. But it did not release the data for net income.
A survey conducted by Yonhap Infomax, the financial data agency of Yonhap News Agency, found that the actual operational profit came in at a level that was 79.5 percent lower than the average estimate.
The number two home appliance manufacturer in South Korea reported a projected operational profit of 3.54 trillion won for the year 2022. This was a decrease of 12.6 percent from the previous year.
Its annual sales expanded 12.9 percent on-year to a record 83.46 trillion won, with the data for net profit not available.
It is the first time the company has exceeded 80 trillion won in annual sales.
LG Electronics did not provide specifics on its fourth-quarter earnings, but experts believe that a rise in raw material prices, increased marketing costs, and a weakening Korean currency have likely harmed the company’s bottom line during the October-December period.
The prolonged Russia-Ukraine war has impacted worldwide demand for televisions in particular, while growing promotion expenditures to sell its inventory also contributed to the significant quarterly drop.
However, LG Electronics is predicted to maintain its lead in the global home appliance industry in terms of sales in 2022, followed by US Whirlpool.
For the first time, the Korean company ascended to the top position in 2021.
Its EV components business, on the other hand, is expected to stay profitable as the car chip constraint gradually eases and auto production rises.
Analysts predicted LG Electronics to turn around in the new year due to lower logistical expenses and raw material pricing.
“LG Electronics will likely post 1 trillion won in operating profit thanks to sales growth in overall business, including home appliances,” said Kim Dong-won from KB Securities.
LG Electronics shares rose 0.89 percent to 90,700 won on Friday, trailing the 1.12 percent rise in the wider KOSPI.
The profits forecast was issued after the market closed.
