Samsung and LG Electronics, Rising Expectations for Surprise Q3 Earnings

Strong Sales Performance of Hygiene Appliances and TVs
Expecting Positive Spillover Effect from US Huawei Sanctions

[Asia Economy Reporter Dongwoo Lee] The domestic home appliance industry is expected to achieve better-than-expected results in the third quarter of this year. The prolonged COVID-19 pandemic has led to a 'pent-up effect,' where previously suppressed demand is resurging, and continued orders for semiconductors and communication equipment are anticipated to positively impact performance.

According to financial information firm FnGuide on the 13th, Samsung Electronics is projected to record an operating profit of 9.2891 trillion KRW in the third quarter of this year, a 14% increase compared to the previous quarter (8.1463 trillion KRW).

The industry expects strong performance in the set business and a shipment volume of Quantum Dot Light Emitting Diode (QLED) TVs to increase by more than 40% compared to the previous quarter. It is also analyzed that increased TV sales in the second half of the year could widen the market share gap with global home appliance companies such as Japan's Sony. The industry anticipates surpassing 10 trillion KRW in quarterly operating profit for the first time in over two years since the fourth quarter of 2018.

Furthermore, Samsung Electronics recently agreed to supply the latest 5G (5th generation network) communication equipment worth 7.9 trillion KRW to Verizon, the largest mobile carrier in the United States, brightening future business prospects.

The industry forecasts LG Electronics' operating profit for the third quarter of this year to increase by 44.5% to 716.1 billion KRW compared to the previous quarter (495.4 billion KRW). The prolonged COVID-19 pandemic has driven demand for hygiene appliances and premium TVs, leading to improved performance. In particular, the sales proportion of new appliances such as dryers and stylers is expected to rise from 8% last year to 30% in the second half of this year.

LG Electronics' Changwon plant has been operating all production lines at full capacity since last month, except for some seasonal appliances like air conditioners. The home appliance sector, which accounts for about 38% of sales, is also expected to increase further in the second half of this year.

The smartphone and automotive parts businesses are also reducing their losses. The smartphone business is benefiting from the recent U.S. sanctions against China's Huawei and the resumption of operations by global automakers, increasing the likelihood of a rebound in the automotive electronics business.

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