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| Edited By: |Source: Reuters |Updated: Mar 16, 2018, 06:12 AM IST
LG Electronics Inc posted better-than-expected results thanks to strong sales of key handsets and TVs, but faces weakening earnings momentum.
The world's No 3 mobile phone maker is headed for a weaker fourth quarter on higher marketing costs and price competition for its bread-and-butter handsets and flat-screen TV sets.
LG, which trails Nokia and Samsung Electronics Co Ltd in mobile phones, might be hit by a recovery in the won after the local currency's weakness helped LG weather the global crisis.
"A stronger won will definitely hit its overseas sales," said Chang In-whan, CEO and fund manager at KTB Asset Management.
"It wouldn't be a big problem if the won remains at around 1,150 per dollar, but the currency is seen strengthening past the 1,100 level next year."
Other than the currency factor, analysts were confident about LG's ability to perform well in 2010.
"Profit might go down due to larger marketing expenses or lower product prices, but if it brings bigger market share, it would be better to spend on marketing this quarter for next year," said Jay Yoo, an analyst at Korea Investment Securities.
As of 0520 GMT, LG shares rose 2.5% following the results, recovering from early losses versus a 0.2% fall in the broader market. The stock is up about 60% so far this year, outperforming the market's 47% gain.
On Wednesday, LG reported a global-basis operating profit of 850 bn won ($732.9 mn) in the third quarter, above a consensus forecast of 757.8 bn won by analysts polled by Thomson Reuters I/B/E/S.
