LG Energy Solution quarterly profit slightly misses estimates

SEOUL, July 27 (Reuters) – Tesla-supplier LG Energy Solution Ltd (LGES) (373220.KS) posted on Wednesday a quarterly profit that slight missed expectations due to rising raw material costs and COVID-19 curbs in China.

South Korea's LGES, which also sells electric vehicle (EV) batteries to automakers including General Motors Co (GM.N), Ford Motor Co (F.N) and Volkswagen AG (VOWG_p.DE), said its operating profit declined to 196 billion won ($149.48 million) for the April-June period from 724 billion won a year earlier.

The year-ago number included a large one-time gain.

The latest profit number was below analysts' average estimates of 199 billion won from Refinitiv SmartEstimate.

The year-ago quarter included a one-time gain from a settlement with LGES' domestic rival SK On. Excluding those gains, the profit decline would have been a modest one, LGES said in a preliminary earnings statement earlier this month.

Revenue fell 1.2% on year to 5.1 trillion won, LGES said in a regulatory filing.

LGES' sales to Tesla Inc (TSLA.O) during the quarter took a knock because the U.S. electric car maker had to pause production at its Shanghai factory in March and April due to China's COVID-19 related lockdowns.

While battery makers like LGES have long term supply deals with car makers, delivery arrangements typically depend on production schedules and prices can be renegotiated based on agreed terms, analysts said.

($1 = 1,311.2200 won)

Reporting by Heekyong Yang and Jihoon Lee; Editing by Himani Sarkar and Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Source:www.reuters.com