LG Electronics Q4 profit plunges 80% as rivals crowd out TV business

LG's quarterly revenue fell 7 per cent to 15.8 trillion won, in line with the company's estimate.
LG's quarterly revenue fell 7 per cent to 15.8 trillion won, in line with the company's estimate.PHOTO: REUTERS

SEOUL (REUTERS) -South Korea's LG Electronics Inc posted its slowest quarterly profit growth in two years on Thursday citing higher marketing costs and tougher competition in the television business.

Fourth-quarter operating profit plummeted 80 per cent from a year earlier to 76 billion won (S$92 million), in line with its earlier guidance, the company said. Revenue fell 7 per cent to 15.8 trillion won, matching the company's estimate.

Widening losses in the company's struggling mobile business also dragged down profit, analysts said.

"LG Electronics' mobile business has not been generating profits at all. On top of that, high marketing expenses for its slow-selling handset models hurt the overall profit," said Eo Kyu-jin, an analyst at eBest Investment and Securities.

Competition in the high-end television set market, particularly from Chinese rivals, as well as global economic headwinds are clouding the outlook for LG Electronics, analysts said.

LG's share price fell 1.5 per cent in a flat broader market on Thursday after the results were released.