LG Electronics posted record-breaking revenue and operating profit in the third quarter this year on the back of solid television sales, although the company's mobile division continued to struggle.
The company’s consolidated revenue stood at 15.7 trillion won ($13.4 billion), its highest third-quarter figure, while operating profit was a 10-year high of 781 billion won, up 4.4 percent on-year.
The net profit, however, dropped 30.5 percent from a year earlier and marked the 18th consecutive quarterly loss, mostly due to its lackluster mobile business.
LG credited the solid TV sales and reduced loss on mobile phone business for its earnings. However, the mobile division’s revenue was still worse than the previous year.
The mobile communications division posted revenue of 1.5 trillion won and an operating loss of 161 billion won. The operating loss improved twofold compared to the second quarter, but was still roughly a 20 billion won-worse report compared to last year. The revenue fell both on-year and on-quarter.
LG said that despite the launch of dual-screen phones, the global smartphone market has seen a decline in demand and a slower-than-expected turnover of the 5G network service. The on-quarter operating loss improvement is said to be because of the relocation of its manufacturing facility from Pyeongtaek, Gyeonggi Province, to Vietnam.
Still, LG’s combined revenue this year is 46.2 trillion won, an internal record and a 1.5 percent on-year rise.
The LG Home Appliance & Air Solution Company reported its highest third-quarter sales of KRW 5.33 trillion (USD 4.46 billion), increasing nearly 10 percent from the same period last year thanks to strong performance in North America, Europe, Asia and the Middle East. Operating income of KRW 428.9 billion (USD 359.2 million) represented a 3.8 percent increase from the third quarter last year due to a combination of improved sales, ongoing cost reductions and lower raw material prices.
The LG Home Entertainment Company recorded quarterly revenues of KRW 3.87 trillion (USD 3.24 billion), an increase of 3.5 percent from the 2018 period, reflecting strong sales in Latin America and the Middle East. Although operating income of KRW 318 billion (USD 266.3 million) declined slightly from a year ago due to intense market competition and a weaker exchange rate, strong sales of premium products such as OLED TVs resulted in a healthy quarterly operating margin of 8.2 percent for the quarter.
The LG Mobile Communications Company reported sales of KRW 1.52 trillion (USD 1.27 billion) for the quarter in a challenging global smartphone market. Compared with the previous quarter, operating loss narrowed significantly to KRW 161.2 billion (USD 135 million) due to production efficiencies and cost improvements.
The LG Vehicle Component Solutions Company generated quarterly revenues of KRW 1.34 trillion (USD 1.12 billion), an increase of 14 percent from the third quarter last year thanks to increased sales in infotainment systems. Higher mass production setup costs related to new projects contributed to an operating loss of KRW 60.1 billion (USD 50.3 million) in the third quarter of 2019.
The LG Business Solutions Company reported sales in the third quarter of KRW 698.7 billion (USD 585.2 million), 21.2 percent higher than the same quarter last year due to stronger sales of information displays and solar modules in key markets. Operating income increased 90 percent year-on-year to KRW 66.8 billion (USD 55.9 million) as a result of improved productivity and higher sales.
LG said it will focus on the premium segment in the fourth quarter to strengthen its business portfolio and efficiently allocate marketing budget.
The mobile phone market, on the other hand will enter the high season in the fourth quarter. The mobile division of LG said it will focus on the successful global launch of its latest improved dual-screen device.
The vehicle component division said it will closely watch the electric vehicle policies in the overseas market to efficiently utilize resources.