LG Electronics profit misses forecasts as TV business sinks into red
SEOUL (Reuters) - South Korean consumer electronics maker LG Electronics Inc on Wednesday reported a weaker-than-expected first-quarter profit, as the television division sank to its first operating loss since 2010.
The world's No. 2 TV maker behind Samsung Electronics Co Ltd blamed weaker currencies in emerging markets for the TV division's operating loss, although it said conditions should improve in the second quarter.
Analysts have cut their earnings outlook for LG due to the currency moves, which make LG's screens more expensive in markets such as Brazil and Russia.
LG's January-March operating profit fell 36.2 percent to 305 billion won (186 million pounds) from a year earlier, below a 319 billion won mean estimate from a Thomson Reuters I/B/E/S survey of 35 analysts.
The TV division's operating loss stood at 6.2 billion won, compared with a 216 billion won profit a year ago and a 2.1 billion won profit in October-December.
The firm said it hoped to boost TV margins by selling a greater portion of premium products in the second quarter, but it gave no indication of when it expected the screen business to return to profitability.
The mobile division turned a profit of 72.9 billion won, rebounding from a 7.3 billion won loss a year earlier to post its fourth consecutive quarter of positive earnings.
The launch of its new flagship G4 smartphone in South Korea earlier Wednesday would further improve profits, the company said.
The phones come with a 5.5-inch display, a leather back cover, better cameras and upgraded components like a new Qualcomm Inc Snapdragon 808 chip.
LG plans to sell 12 million G4 phones, up from nearly 10 million G3 phones sold since their May 2014 launch, though the firm did not say when its G4 sales target would be met.
Some analysts are sceptical about how the G4 will compete against Samsung's new Galaxy S6 phones, which have sold well since they went on sale earlier this month.
The 32-gigabyte version of the G4 was priced at 825,000 won in South Korea, less than the 899,800 won launch price for the G3 and 858,000 won price for the flat-screen Galaxy S6.
Shares of LG Electronics ended 0.3 percent higher on Wednesday, compared with a 0.2 percent fall for the broader market.
(Reporting by Se Young Lee and Sohee Kim; Editing by Stephen Coates)
