LG Electronics Shares Slide as Q3 Profit Misses Estimates

LG Electronics shares dropped sharply on Wednesday after the South Korean technology giant reported preliminary third-quarter operating profit that fell short of market expectations, despite delivering solid year-on-year growth in both earnings and revenue.

The company estimated operating profit of 781.8 billion won ($583.8 million) for the third quarter, representing a 13.5% increase from the same period a year earlier. Revenue climbed 8.9% year over year to 23.83 trillion won, reflecting continued sales growth across the electronics maker’s businesses.

However, LG Electronics’ quarterly operating profit was roughly 17% below the average market forecast of 941.7 billion won compiled by Yonhap Infomax. The earnings miss weighed heavily on investor sentiment and triggered a steep decline in the company’s stock.

LG Electronics shares listed in Seoul fell 7.7% to 214,500 won by 03:21 GMT on Wednesday, reversing a strong advance recorded during the previous trading session. The selloff highlighted investor concerns over profitability despite the company’s expanding revenue base.

Performance over the first nine months of the year remained considerably stronger. LG Electronics reported cumulative revenue of 71.38 trillion won, an increase of 9.2% compared with the same period last year. Operating profit for the nine-month period surged 55.9% to 4.03 trillion won, indicating substantial earnings growth despite the weaker-than-expected third-quarter result.

The figures released Wednesday are preliminary and do not include LG Electronics’ net income. They also remain subject to an external audit and could be revised when the company publishes its finalized financial statements.

Investors will now turn their attention to LG Electronics’ full third-quarter earnings report, expected later this month. The detailed results should provide further insight into the factors behind the operating profit miss, as well as the company’s outlook for revenue growth, margins and demand across its major electronics businesses.