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LG Electronics third-quarter profit jumps on strong sales of TVs, appliances
October 26, 2017 / 6:42 AM / 25 days ago

LG Electronics third-quarter profit jumps on strong sales of TVs, appliances

SEOUL (Reuters) - South Korea’s LG Electronics Inc said on Thursday its third-quarter operating profit rose 82 percent from a year earlier, as healthy sales for its televisions and appliances offset another loss for the mobile division.

A man talking on his phone walks past the logo of LG Electronics during Korea Electronics Show 2016 in Seoul, South Korea, October 27, 2016. REUTERS/Kim Hong-Ji/Files

July-September profit for the world’s second-largest TV maker climbed to 516 billion won ($459 million) on a 15.1 percent rise in revenue, in line with guidance given by the company earlier this month.

The jump in profits reflected “strong profitability in home entertainment and appliances despite the gloomy business environment resulting from increasing international trade concerns,” LG said in a statement.

The firm forecast fourth-quarter earnings would fall quarter-on-quarter but continue to show stable profitability.

Sales of high-end televisions, including those with organic light-emitting diode (OLED) screens, helped earnings at its TV division rise 20 percent from a year earlier to a quarterly record of 458 billion won, with an operating margin of 9.9 percent.

Operating profit for the appliances division jumped 26 percent to 425 billion won, thanks to sales of high-margin products such as its premium-label refrigerators and washers.

But the firm’s mobile division reported a 375 billion won loss, its 10th consecutive quarterly loss. It was hit by declines in sales of its flagship G6 phones released in the first half of the year, and higher spending on marketing as rivals launched new products.

LG released its latest premium V30 model toward the end of the quarter so most of those sales have yet to be reflected in earnings.

The electronics giant may face restrictions on exports to the United States going forward, following a ruling this month by the U.S. International Trade Commission that surging imports of large residential washing machines harmed domestic producers.

LG, in an earnings call, said there could be temporary relocation of production, but that it did not expect fundamental issues and could bring forward the operation date of its new U.S. factory in Tennessee, previously announced as early 2019.

Earlier this month, the commission did not find that washing machines made specifically in South Korea, already subject to anti-dumping duties, were responsible for harming U.S. manufacturers.

($1 = 1,124.0300 won)

Reporting by Joyce Lee; Editing by Sonali Paul and Stephen Coates

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