More Pain Faced By LG Electronics after a Record Q3 Loss

October 29th, 2010   Alexandr Kohn   Business, Featured news

LG, the South Korean company after making a record quarterly operating loss shows it faces an uphill task turning around the business of cell phones and imposing more pressure upon the new chief executive.

LG left behind in the cell phone race with Apple and is also shown a tough time by the No.1 and No.2 rivals, Nokia and Samsung respectively.

There is a completion in the prices of flat screen Televisions (TV) against Sony Corp and Panasonic Corp. LG being the world No.2 TV Brand.

An analyst at the SK Securities, Nam Dae-jong, stated that LG’s smart phone have a problem with their strategy which is the misjudgment of the market and they tend to react late. LG will probably catch up in the smartphone business if they invest upon research and development in the area.

Kon Bon-joon when took over as the CEO of the group’s flagship firm this month. His objective has been to turn around the loss-making cell phones and restore sales growth.

Koo stated to be certain to become No.1, thus replacement of all the heads of the phone and TV division were made by him.

Shim Hong-seop said that LG’s shares have been underperforming reason being the weak earnings.

Even though the shares are close to the bottom but it isn’t expected to bounce significantly considering their current weak shape.

Market gain this year has been 13 percent, whilst the drop in stock market has been 16 percent. Past 30 days, the market has cut his year’s estimates for LG’s profit by 11.3 percent. These figures were brought forward by Thomson Reuters StarMine.

A record operating loss of 185 billion won ($164 billion) in July September from a profit of 851 billion won over a year ago. A match of the consensus loss forecast of 185 billion won.

Written by Alexandr Kohn

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