LG Electronics plunges more than 10% on Q3 earnings miss as LG Innotek weakness weighs [STOCK NOW]

[The Financial News] LG Electronics is seeing its share price plunge more than 10% after reporting results below market expectations for the third quarter of this year.
Although results themselves improved from a year earlier, weakness in the profitability of consolidated subsidiary LG Innotek, among other factors, is believed to have kept the company from meeting market expectations.
As of 2:08 p.m. on the 7th, LG Electronics shares were trading at 208,500 won, down 24,000 won (10.32%) from the previous trading day.
The shares rose as high as 238,000 won during the session, but then quickly extended their losses, falling to 208,000 won. In effect, they gave back most of the previous day's 7.87% surge in a single day.
Trading volume also rose sharply. The current volume is 2,698,624 shares, about 87% of the 3,087,930 shares traded over the entire previous day. Trading appears to have surged as sell orders piled up following the earnings announcement.
LG Electronics announced that it posted third-quarter consolidated revenue of 23.827 trillion won and operating profit of 781.8 billion won. Revenue rose 8.9% and operating profit increased 13.5% from a year earlier.
Cumulative operating profit for the first three quarters also rose 55.9% year on year to 4.0346 trillion won, surpassing 4 trillion won for the first time on a cumulative first-three-quarter basis.
The issue was that the results fell short of market expectations. According to FnGuide, the consensus forecast for third-quarter revenue was 24.215 trillion won and for operating profit was 1.0301 trillion won. Actual operating profit came in about 24% below the market forecast, while revenue was about 1.6% lower.
The market sees LG Innotek's weak profitability in particular as having weighed on consolidated results. Analysts say profitability deteriorated as products made using raw materials purchased in the second quarter, when exchange rates were high, began shipping in earnest in the third and fourth quarters.
However, it would be difficult to say that LG Electronics' core businesses were all under pressure. Its home appliance and vehicle components businesses maintained stable profitability in the B2C and B2B sectors, respectively, while profitability in its TV business also improved. The company says it offset higher logistics and material costs through improvements to its cost structure and a lighter fixed-cost burden resulting from increased sales.
Going forward, key factors for the share price are expected to include a recovery in LG Innotek's results and when new businesses, such as AI data center cooling solutions and robotics, begin contributing to earnings.

[email protected] Kang Jung-mo Reporter