By Kwanwoo Jun
LG Electronics guided for quarterly operating profit to nearly halve from a year earlier, a weaker-than-expected forecast that sent its shares sharply lower.
Higher U.S. tariffs and intensified market competition weighed on performance for the April-June period, the South Korean consumer-electronics giant said.
"The slowdown reflects continued weakness in consumer sentiment across major markets and an increasingly challenging external environment," LG said in a statement.
In a preliminary earnings report, LG said its operating profit could drop 47% to 639.10 billion won, equivalent to $469.1 million, for the second quarter.
Analysts had expected 901.07 billion won, according to a FactSet-compiled consensus estimate.
LG Electronics also projected lower revenue, expecting the top line to have fallen 4.4% to 20.740 trillion won, missing analysts' estimate for a much smaller decline.
Shares of the company extended losses following the below-consensus guidance and were recently 2.9% lower.
LG said Monday that its home-appliance and business-to-business segments remained profitable despite unfavorable conditions, but its media and entertainment division, which includes television sales, suffered due to sluggish demand, higher liquid-crystal-display panel prices and increased marketing expenses.
Increased business costs stemming from higher U.S. tariffs and logistics expenses hurt profitability, it said.
Ahead of the guidance, some market analysts had said that higher LCD prices likely pressured profit margins.
Restocking demand for home appliances may also have slowed following a rush of orders ahead of higher U.S. tariffs, Daishin Securities analyst Kangho Park said in a recent note.
LG Electronics is scheduled to release its full quarterly results later this month.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
07-07-25 0027ET
