By Heekyong Yang and Byungwook Kim
SEOUL (Reuters) – South Korea’s LG Energy Solution Ltd on Wednesday reported a smaller-than-expected 24% drop in quarterly profit as strong sales of its cylindrical batteries to Tesla Inc offset a hit to production due to chip shortages.
Operating profit declined to 259 billion won ($205.01 million) for the January-March period from 341 billion won a year earlier, said the South Korean battery giant, which also counts as customers General Motors Co and Volkswagen AG.
An average of 16 analyst estimates was profit of 141 billion won, according to Refinitiv SmartEstimate.
Revenue rose 2.1% to 4.3 trillion won.
The company, which also supplies batteries to electric-vehicle maker Lucid, said last month it plans to invest 1.7 trillion won to build a battery factory in Arizona by 2024 to meet demand from prominent startups and other North American customers.
Shares of LGES, carved out of LG Chem Ltd in a market debut in January, were trading down 4.4% versus, the benchmark KOSPI’s 1.9% fall as of 0013 GMT.
($1 = 1,263.3300 won)
(Reporting by Heekyong Yang and Byungwook Kim; Editing by Jacqueline Wong and Christopher Cushing)