LG Electronics' fourth quarter profit plunges as rivals crowd TV business

FILE PHOTO: A man examines LG Electronics' double-faced and curved OLED TV during Korea Electronics Show 2016 in Seoul, South Korea, October 27, 2016. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) - South Korea’s LG Electronics Inc posted its slowest quarterly profit growth in two years on Thursday citing higher marketing costs and tougher competition in the television business.

Fourth-quarter operating profit plummeted 80 percent from a year earlier to 76 billion won ($68.5 million), in line with its earlier guidance, the company said. Revenue fell 7 percent to 15.8 trillion won, matching the company’s estimate.

Widening losses in the company’s struggling mobile business also dragged down profit, analysts said.

“LG Electronics’ mobile business has not been generating profits at all. On top of that, high marketing expenses for its slow-selling handset models hurt the overall profit,” said Eo Kyu-jin, an analyst at eBest Investment and Securities.

Competition in the high-end television set market, particularly from Chinese rivals, as well as global economic headwinds are clouding the outlook for LG Electronics, analysts said.

LG’s share price fell 1.5 percent in a flat broader market on Thursday after the results were released.

Reporting by Heekyong Yang and Ju-min Park; Editing by Stephen Coates