Seoul: LG Electronics has estimated that its fourth-quarter sales reached a record quarterly high, apparently backed by its strong home appliance business, but the operating profit is likely to sink due largely to increased logistics costs.
The company expected to log 21 trillion won ($17.5 billion) in sales for the September-December period, up 20.7 per cent from a year earlier, it said in a regulatory filing.
Operating income, however, likely came in at 681.6 billion won, down 21 per cent from a year ago.
The fourth-quarter operating profit prediction was 16.2 per cent lower than the market consensus of 813.7 billion won in a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
Compared with the third quarter, the operating profit likely advanced 26.1 per cent, with the sales rising 11.8 per cent, according to the estimates.
If the preliminary results become official, the fourth-quarter sales would represent the largest-ever quarterly performance in the company’s history.
On the cumulative basis, the tech company is expected to have earned 74.72 trillion won in sales and 3.86 trillion won in operating profit for 2021.
Analysts said robust demand for household appliances, LG’s mainstay business, likely helped drive up the revenue.
“Such demand, especially for the premium lineup in the North America market, appears to not have peaked yet, meaning that we could possibly expect further momentum in the first half of next year,” Kim Ji-san, an analyst at Kiwoom Securitis Co., said.
Analysts predicted a replacement cycle for electrical appliance items among US consumers in the first half of this year.
