LG boasts of record sales, profit in Q3LG Electronics reported its best quarterly sales and operating profit ever for the third quarter, according to the electronics company’s preliminary report unveiled on Monday.
Sales for the first three quarters of the year were also the best in the company’s history, but the operating profit in that same period dipped on year.
LG Electronics on Monday said its sales in the July-September period were 15.699 trillion won ($14.03 billion), a 1.8 percent increase on year. Its operating profit stood at 781.1 billion won, 4.3 percent higher than in the previous year.
LG Electronics didn’t disclose which business divisions attributed to the boosts in sales and operating profit, but industry insiders speculate the performance was largely driven by the mobile phone and household appliance divisions.
The company will break down sales and profit by division in an earnings announcement scheduled for later this month.
Operating profit was better than expected.
NH Investment & Securities last week speculated that the company’s operating profit in the third quarter would be 592.2 billion won, a 21 percent dip year-on-year, and sales would be 15.8 trillion won, a 2 percent increase on year. Kyobo Securities projected 665.6 billion won in operating profit and 16.17 trillion won in sales.
LG said it was its best third quarter performance ever, and that its accumulated sales for the year so far, 46.24 trillion won, were the highest in company history.
But operating profit for the first three quarters totaled 2.33 trillion won, which was 11.2 percent lower than a year ago.
In the first quarter, LG reported 900.6 billion won in operating profit, an 18.1 percent dip on year, and saw a bigger drop in the second quarter to 650 billion won, down 15.3 percent on year, due to its lagging smartphone business.
The costs of relocating LG’s smartphone factory from Pyeongtaek in Gyeonggi to Vietnam also affected the bottom line.
“Although [LG Electronics] faced costs from relocating its factory to Vietnam, the cost is seen to have been limited in the third quarter,” said analyst Ko Jeong-woo from NH Investment & Securities in a report.
Considering seasonal factors, the electronics giant is likely to see reduced operating profit in the fourth quarter. Reduced demand for household appliances like air conditioners and the marketing costs for televisions at the year-end will likely chip away at the company’s operating profit, according to Ko.
BY JIN MIN-JI [email@example.com]