LG Releases Tentative Earnings for Q4 2016, with an Estimated $29.5 Million Operating Loss

LG Releases Tentative Earnings for Q4 2016, with an Estimated $29.5 Million Operating Loss

LG Electronics has announced preliminary earnings results for the fourth quarter of 2016. The revenue table below showcases consolidated revenues for Q4 2016, but still offers us insight into what to expect on the year-end balance sheet.

Estimated Q4 2016 (in kRw Bn) Estimated Q4 2016 (in USD Mn) Q3 2016 (in kRw Bn) Q3 2016 (in USD Mn) QoQ Q4 2015 (in kRw Bn) Q4 2015 (in USD Mn) YoY
Sales 14,781.9  12,356.1 13,224.3  11,054.1 11.8% 14,560.1  12,170.7 1.5%
Operating Profit / (Loss) (35.3)  (29.5) 283.2  236 349.0  291

(South Korean Won to USD conversion at current exchange rates)

Revenue for Q4 2016 is estimated to be higher not only quarter-on-quarter, but year-on-year as well. The sales for LG Electronics for Q4 2016 is estimated at $12.3 Billion, which is an increase from the $11 Billion in sales from the previous quarter, and the $12.2 Billion from the previous year.

The catch here is that the figures indicated are consolidated revenues, including all sales from all divisions within LG Electronics. This does not immediately put the smartphone division in the red, but the Operating Loss of $29.5 Million despite the increase in sales indicates that there has been sizeable expenditure by the company.

From previous earning reports, like the report from Q3 2016, we know that most of the profits of that quarter originated from the Home Appliances and Air Solution division. The mobile division had an operating loss of $389.4 Million despite the $2.3 Billion contribution to revenue. So even though the division could bring in sales, they were not sizeable enough to set off the expenditure incurred in product development and marketing and advertisement.

With the LG V20 released in September, it will be interesting to see how the figures play out. Will the V20 have enough sales to cover the R&D and promotional expenditure? Or will it manage to disappoint despite the monumental failure of the competing Note 7 in the phablet segment? Only time and Q4 reports will tell.

What are your thoughts on LG’s tentative earnings for Q4 2016? Let us know in the comments below!

Source: LG Newsroom

Discuss This Story

READ THIS NEXT