[THE INVESTOR] LG Electronics is expected to post weaker-than-expected earnings for the third quarter due to deepening loss on poor smartphone sales, according to Hana Financial Investment.

LG Electronics is expected to post an operating profit of 245 billion won (US$223.17 million) in the July-September period, down 11 percent from a year earlier, it said in a note to investors.

The firm’s revenue in the third quarter is likely to decrease 6 percent year-on-year to 13.54 trillion won. 




“Its net loss from its mobile communication business is estimated to expand from the previous quarter to 287.7 billion won because of lackluster sales of smartphones, which seems to be worse than expected,” said Kim Rok-ho, an analyst at Hana Financial Investment.

Kim said a meaningful improvement from the smartphone business is unlikely in the fourth quarter as well.

In stark to contrast to the gloomy outlook for smartphone sales, LG Electronics’ television and home appliance businesses are expected to show robust growth.

Its home entertainment division is estimated to post 260.5 billion won in operating profit, up 604 percent from a year ago.

Its home appliance division is expected to log a 15 percent increase in operating profit to 282.4 billion won, according to the analyst.

By Park Han-na (hnpark@heraldcorp.com)