LG Electronics Inc., the world’s third-largest mobile-phone maker, fell to the lowest level in 11 months in Seoul trading after the company said a recovery at the handset business may take longer than some analysts expected.
LG fell 1.2 percent to 93,100 won at the 3 p.m. close of trading in Seoul, the lowest since July 1. The stock dropped as much as 3.4 percent earlier in the trading session. South Korea’s Kospi index closed little changed.
Koo Bon Joon, who took over as chief executive officer in October, told reporters yesterday that it will be difficult for the handset unit to return to profit in the second quarter, according to Sally Lee, a spokeswoman for Seoul-based LG. At least four brokerages including Shinhan Financial Group Co. and Kiwoom Securities Co. predicted in April and May that the mobile-phone division would post a profit in the second quarter.
LG’s mobile-phone division had an operating loss of 100.5 billion won ($93 million) in the first three months of the year, contributing to a second straight quarterly loss for the company. Sales and earnings will improve this quarter, helped by new Optimus smartphones running Google Inc.’s Android software and TVs featuring 3-D functions, Chief Financial Officer David Jung said April 27, after LG reported earnings.
The company’s TV unit is also struggling because of high inventory, Lee cited Koo as having said.
LG’s share in the global mobile-phone market declined to 5.6 percent in the first quarter from 7.6 percent a year earlier, Gartner Inc. said on May 19.