Samsung Electronics and LG Electronics Q4 Earnings Announcement Imminent, Expectations for Improvement Grow

[Asia Economy Reporter Changhwan Lee] The earnings announcements for the fourth quarter of last year from major domestic electronics companies such as Samsung Electronics and LG Electronics will begin this week. The financial investment industry views that the electronics sector's performance is bottoming out and is expected to improve further in the first half of this year.

According to related industry sources on the 5th, Samsung Electronics and LG Electronics will disclose their preliminary fourth-quarter earnings within this week.

The financial investment industry predicts Samsung Electronics' fourth-quarter earnings to be around KRW 61 trillion in sales and KRW 6.5 trillion in operating profit. Sales are expected to increase by about 2% compared to the same period last year, but operating profit is forecasted to plunge by 39%.

The decline in earnings is due to a significant drop in semiconductor prices. Mirae Asset Daewoo Securities predicted that operating profit in the semiconductor division would fall from KRW 44.5 trillion in 2018 to KRW 13.7 trillion last year.

However, in the fourth quarter, the semiconductor division's performance was evaluated to be less bad than initially expected, as the weakness in DRAM was offset by NAND flash.

Although the semiconductor slump is expected to negatively impact Samsung Electronics' overall performance last year, the consensus is that this year's performance will improve.

Mirae Asset Daewoo expects this year's sales to reach KRW 245.5 trillion and operating profit to be KRW 38.9 trillion, increasing by 7.1% and 41.0%, respectively. They explained that the rise in DRAM prices is progressing faster than expected, with semiconductor division operating profit reaching KRW 22.1 trillion, and the wireless division earning KRW 11.2 trillion in operating profit from foldable phones.

LG Electronics' fourth-quarter earnings are expected to be around KRW 16 trillion in sales and KRW 290 billion in operating profit. Compared to the same period last year, sales are up 4%, and operating profit has increased by 284%.

However, smartphone profitability is estimated to have worsened in the fourth quarter of last year as well. While sales are expected to increase by 4.9% compared to the previous quarter, operating profit is predicted to decrease by 62.7%.

Daishin Securities evaluated the fourth-quarter earnings as favorable, considering the smartphone division's slump, weak sales of off-season home appliances, and intensified competition in TV sales.

However, in the first quarter of this year, operating profit is projected to increase by 221% compared to the previous quarter due to entering the peak season, expansion of premium home appliances, and increased TV sales volume from adding to the OLED TV lineup.

This content was produced with the assistance of AI translation services.