By Kwanwoo Jun
LG Electronics Inc. said it expects its third-quarter operating profit to plunge, as an additional cost for covering General Motors Co.’s recall of LG-supplied electric-vehicle batteries dented its otherwise solid earnings.
The South Korean consumer-electronics giant said Tuesday that it estimates operating profit of 540.70 billion won ($452.2 million) for the quarter ended September, down 50% from a year earlier.
Revenue, however, is expected rise 22% to KRW18.785 trillion for the quarter, as analysts say demand remained solid for televisions and other home appliances.
The quarterly earnings forecast is well below FactSet-compiled market consensus for KRW1.119 trillion in operating profit.
The company said it set aside KRW480 billion in the third quarter as an additional provision to cover GM’s second recall in August of Bolt electric vehicles carrying LG batteries.
LG Electronics had recognized a roughly KRW235 billion provisioning cost in the second quarter for GM’s earlier recall.
Analysts say the company could also face headwinds from softer demand for electronics goods at home as vaccinated workers return to offices and amid global supply-chain disruptions.
LG Electronics is due to release its full quarterly earnings later this month.
Write to Kwanwoo Jun at email@example.com