LG Energy Solution slashes earnings guidance on weak EV demand; shares drop By Reuters

By Heekyong Yang and Jihoon Lee

SEOUL (Reuters) -South Korean battery firm LG Energy Solution (LGES) posted on Thursday a 58% drop in quarterly profit, hit by weakening demand for battery-powered electric vehicles (EVs).

The company, which supplies Tesla (NASDAQ:), General Motors (NYSE:), Hyundai Motor (OTC:) and other automakers, reported an operating profit of 195 billion won ($141 million) for the April-June period, in line with an earlier forecast.

The result compared with a 461 billion won profit a year earlier.

The company would have made a 253 billion won operating loss in the quarter without a tax credit it received under the U.S. Inflation Reduction Act, LGES said in a regulatory filing.

Revenue for the quarter fell 30% to 6.2 trillion won.

LGES said it lowered its annual revenue target to a more than 20% decline this year due to slower-than-expected EV market growth. Its previous target was mid-single percentage growth compared to 2023.

Shares of LGES fell as much as 2.6% versus the benchmark ‘s 1.6% fall in morning trade, hitting their lowest price since listing in January 2022. That followed a drop on Wall Street which included a 12% fall in Tesla stock after its quarterly results disappointed.

($1 = 1,383.9100 won)