SEOUL, Jan. 6 (Korea Bizwire) – LG Electronics Inc. forecast Friday that it is likely to have returned to the red in the fourth quarter of last year, indicating that its money-losing smartphone business appears to have continued to crumble.
LG said it expects an operating loss of 35.3 billion won (US$29.6 million) for the October-December quarter last year, compared with a profit of 348.9 billion won for the same quarter in 2015.
It would be LG’s first quarterly operating loss since the third quarter of 2011, when it reported a loss of 31.9 billion won.
The results missed market expectations. A survey of 11 brokerages by Yonhap Infomax, the financial news arm of Yonhap News Agency, had expected that LG would report a fourth-quarter operating profit of 15 billion won.
With its new smartphones failing to appeal to consumers amid a tougher competition with Chinese brands, LG’s smartphone division has posted operating losses since the third quarter of 2015.
During the October-December quarter last year, LG’s smartphone business is believed to post an operating loss of between 400 billion won and 500 billion won, according to some analysts.
Fourth-quarter sales are estimated at 14.7 trillion won, up 1.5 percent on year, LG said.
For all of 2016, LG said it expects to post an operating profit of 1.33 trillion won, up 12.2 percent on year, on sales of 55.3 trillion won, down 2 percent on year.