Consumer and Consumer Serious. Samsung and LG Electronics, 3Q results

The prospect is that Samsung Electronics and LG Electronics' third-quarter earnings will be slower than expected. This is due to the decline in consumer products such as TV, home appliances, and smartphones due to the global economic downturn. In addition, even semiconductors, which have been strong in the past few years, are expected to fall due to a decline in prices and shipments.

Samsung Electronics '3Q operating profit is lowered, and LG Electronics' operating profit is expected to meet the market consensus.

** ■ Samsung Electronics, home appliances, TVs, and semiconductor lines have fallen.

According to the securities firm on the 30th, Samsung Electronics' 3Q earnings outlook is expected to fall down the market consensus (sales of 78.2 trillion won and operating profit of 12.2 trillion won) with sales of 77.7 trillion won and operating profit of 11.5 trillion won. In the third quarter, sales increased by 1% Qom and operating profit by 18% Qom. Compared to the previous year, sales increase by 5% and operating profit are expected to decrease by 27%.

If Samsung records 3Q sales as expected, it will exceed 70 trillion won in five consecutive quarters. Samsung Electronics surpassed 70 trillion won for the first time, with sales of 73.98 trillion won in the third quarter of last year.

However, there is a lot of concern in that Samsung Electronics' forecast of 3Q operating profit is downward. In July alone, Samsung Electronics' 3Q operating profit forecast was 14.3 trillion won, an increase of 1.8% Qom. Then, the forecast was lowered from 12 trillion won to 11 trillion won.

Samsung Electronics' operating profit estimates for the third quarter of Samsung Electronics are expected to cost KRW 6.7 trillion, display 1.4 trillion won, MX and network 2.7 trillion won, and home appliances/VD's.

In the third quarter, semiconductor, home appliances, and TV businesses are expected to decrease in 2Q due to sluggish demand, and smartphones are expected to be well-runed despite the strong dollar. The display is expected to increase Qom due to the launch of new products in North America. In particular, the display is expected to be profitable due to the end of depreciation of large-scale investments in 2017.

IBM Investment & Securities said, In the third quarter, semiconductors are expected to be much sluggish than expected. The problem is that customers are not responding even though the price drops due to sluggish demand, he said. The demand is spreading from the server to the mobile.

This year's annual earnings are expected to fall below the market forecast. In June, Samsung Electronics' operating profit estimated this year was 56 trillion won, but this month, securities firms lowered 12% to 49.5 trillion won. Next year's operating profit estimation also lowered 31% to 31 trillion won. Samsung Electronics' annual sales forecast for this year is 312 trillion won, which is expected to achieve the first 300 trillion won.

DB Financial Investment & Securities said, The recent sluggish IT set sales due to the recent global economic downturn and the efforts to reduce the inventory of the set companies have entered the visible area since the third quarter. It is expected to improve from the third quarter of next year.

The rapid drop in memory prices will increase the amount of memory of new IT products next year, and it will increase memory shipments after the second quarter, when the launch of the new product is in full swing.

■ LG Electronics, TV demand sluggish… Expected to turn to the black for the second consecutive quarter of the battlefield business

LG Electronics' 3Q earnings forecast is expected to meet the market consensus (20 trillion won in sales and 888.8 billion won in operating profit), with sales of 19.9 trillion won and operating profit of W87.7bn. In the third quarter, sales are expected to increase by 2.2% compared to the previous quarter, operating profit is expected to increase by 10.7%, and sales increase by 5% and 62% compared to the same period last year. LG Electronics' third-quarter earnings forecast, excluding LG Innate, amounted to KRW 15.6 trillion and operating profit of KRW 437.4 billion.

LG Electronics is also observed that profitability has deteriorated due to the decrease in the TV business shipment volume. LG Electronics recorded a deficit in seven years based on the quarterly earnings of LG Electronics' HE (Home Entertainment) division, which is in charge of the TV business in the second quarter. Pent-ups due to Corona 19 have been reduced, and inflation has shrunk due to inflation.

Korea Investment & Securities said, H & A (home appliance) is good in market share despite its sluggish business, but HE (TV, etc.) will increase sales of 5.9% Qom, and it will be slightly slower than conventional prospects. For LG Electronics, the market for developed countries (US, Europe) is important, and the rapid rate hike is determined that the demand for TV in the advanced market is decreasing faster.

The rebound of TV shipments will be possible in the second to third quarter of next year, when the base effect is fast, he said. It will continue in quarter.

LG Electronics is watching whether the battlefield business (VS) can continue its stable profitability in the third quarter following its first surplus. The second quarter of the VS business recorded its first surplus in 26Q 2015.

In securities firms, the VS business is expected to increase by 20.4% from the previous quarter (2.30 trillion won) as the VS business rises in the third quarter. The operating profit of VS business is expected to maintain the surplus as well as increasing costs such as logistics costs and raw material costs.

Korea Investment & Securities said, The company's goal is to increase from 60 trillion won at the end of last year to 65 trillion won by the end of last year.

LG Electronics' annual sales are expected to reach the largest ever. According to the market consensus, LG Electronics' earnings forecast is sales of 82.5 trillion won and operating profit of 4.4 trillion won. LG Electronics recorded its first 70 trillion won with sales of 74 trillion won last year. However, due to the global economic downturn, sales and operating profit are expected to decline next year.