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SEOUL, July 14 (Reuters) LG Electronics Inc. is set to report on Wednesday that its profit halved in the second quarter on losses from mobile phone sales and its flat-screen unit, and analysts don't see a rebound before later this year.

LG, which competes with local rival Samsung Electronics Co. Ltd.

in home appliances, handsets and flat screens, should feel the pinch from a dismal performance at its liquid crystal display (LCD) joint venture, which on Tuesday posted a record loss on cut-throat competition and plummeting prices.

That, combined with negative mobile phone margins and a slight weakening in the home electronics division, meant profits were likely to plunge.

Analysts are only a touch more optimistic about the firm's current quarter.

''I don't see much of a recovery in the handset division before September,'' said SR Kwon, an analyst at Hyundai Securities.

''Investors are losing confidence in LG's ability to grow its phone business.'' LG is expected to post a net profit of 77 billion won ($81.2 million) in the quarter ended June 30, down 49 percent from 150.6 billion a year ago, according to nine analysts polled by Reuters.

Forecasts ranged from 30 billion won to 161 billion.

The figure compares with 150.8 billion won earned in the previous quarter.

Sales are estimated at 5.7 trillion won, against 5.6 trillion a year ago and 5.8 trillion in the first quarter.

For all of 2006, LG is expected to earn a net profit of 697 billion won, down from 702.8 billion earned in 2005, according to Reuters Estimates. This indicates the profit will rise to 469 billion in the second half.

HANDSET WOES TO CONTINUE LG, the world's fourth-biggest mobile phone maker after Nokia, Motorola Inc. and Samsung, should have sold between 14 and 15 million handsets in the second quarter, similar to the first, analysts say.

But margins in the division are likely to have dropped further in the red, down from minus 0.2 percent last year, as a high proportion of sales were low-end shipments to the Indian and U.S. markets.

''Almost half of LG's handset shipment is made up of low-end phones,'' said James Kim, an analyst at Lehman Brothers. ''It's a difficult business.'' LG is betting its third quarter on the release of its slim ''chocolate phone'' in the United States after successful launches at home and in Europe.

But Motorola's strategy to dramatically lower the price of its blockbuster RAZR phone will mean LG will have a hard time selling higher-priced phones to U.S. customers used to paying $70 per handset, analysts say.

Moreover, a record 322 billion won loss at its 38-percent owned LCD joint venture with Philips Electronics, LG.Philips LCD Co. Ltd., in the second quarter should also hit its profits.

Margins at LG's own display division, which makes plasma flat screens (PDPs) and computer monitors, are expected to remain at about 3 percent for most of the year on an upcoming supply glut and rising depreciation costs stemming from new production lines.

LG, the world's top household air-conditioner maker, also is likely to see a disappointment even in its stalwart appliances unit, with margins likely to drop about 1.5 percentage points to 8.5 percent, hurt by slower sales and a 70-percent rise in the price of copper, a key component of air conditioners.

The stronger won currency, which was 8.1 percent higher against the dollar at the end of June from a year ago, also hurt LG, whose exports accounted for 75 percent of total sales.

Shares in LG, which has a market value of $8.5 billion, fell 27 percent in the second quarter, compared with the wider market's 4.7 percent fall.

($1=948.5 Won) REUTERS SBA PM1621