Samsung Electronics and LG Electronics predicted the highest sales this year since the establishments. On the 29th, FnGuide’s reported based on brokerage report that Samsung Electronics' fourth-quarter performance forecasted KRW 75.26 trillion in sales and KRW 15.07 trillion in operation profit. Sales surpassed the 3rd quarter of this year (KRW 73,979.2 billion), which was the highest sales, and operating profit is expected to increase by 67% compared to the same period last year. Samsung is expected to earn an all-time high of KRW 278.67 trillion annually, surpassing the sales from 2018, which was KRW 243,771.4 billion. Operation profit is also expected to reach KRW 52.83 trillion, the highest since 2018, during the super-boom of semiconductor. This was possible because the price decline in 4Q for the main product, DRAM memory, did not decline as drastically as expected.
LG Electronics is expected to record KRW 19.67 trillion in sales and KRW 831.3 billion in operation profit in the fourth quarter of this year. This is the first time in history to set a new record back to back after earning KRW 18 trillion in the third quarter of this year. Operation profit fell short compared to the first quarter of this year (KRW 1.516 trillion), which was record high; however, Samsung expects to increase by more than 27% compared to the same period last year. Annual sales are expected to exceed KRW 70 trillion for the first time in history, reaching KRW 73.70 trillion. Operation profit is also expected to reach KRW 4 trillion for the first time. However, the variable is the recall cost of General Motors (GM) Bolt, which is worth KRW 1.4 trillion.
LG Electronics' earnings were led by the Home Appliances and Air Solution (H&A) and TV (HE) divisions. The H&A business division surpassed KRW 7 trillion in quarterly sales for the first time in the third quarter. Sales of new home appliances such as stylers and dryers also hit an all-time high. In addition to OLED TV, which announced record-high performance by more than doubling shipments compared to last year, the company improved the performance in the Vehicle component Solution (VS) business, which is expanding orders in the recovering auto market.
Both companies will continue to grow in the upcoming year. Samsung Electronics is expected to open an era of KRW 300 trillion in annual sales for the first time this coming year. LG Electronics is also expected to earn KRW 76 trillion in sales and KRW 5 trillion in operation profit with high premium TV sales and a turnaround in the electronics market. Soo-bin Lee, a researcher at Daishin Securities, predicted that “Samsung Electronics is expected to enter the upcycle of DRAM memory semiconductors in the new year.” Yu-mi Cha, a researcher at Mirae Asset Securities, expected the electonics division to flourish, and said with regards to LG Electronics, “The situation of automotive semiconductor parts shortage will improve after the first half of the year.”
Meanwhile, Samsung Electronics and LG Electronics will announce their preliminary results for the fourth quarter of 2021 around January 6-7 of the new year.
<Samsung Electronics Performance and Forecast by Year (Source: FnGuide, Unit: KRW 100 million)
By Staff Reporter Yong-cheol Jung (jungyc@etnews.com)