LG Electronics Posts Higher Quarterly Profit as Its Mobile Losses Narrow
South Korea’s LG Electronics said on Thursday third-quarter operating profit jumped 45 percent as its mobile phone division narrowed losses.
A focus on sales of mid-range mobile phones and cost-reduction plans contributed to smaller losses in its mobile division, LG said in a statement.
Operating profit reached KRW 749 billion ($657.83 million) in the July-September quarter, in line with the company’s guidance.
Quarterly revenue rose 1 percent to KRW 15.4 trillion, also in line with the company’s estimate.
The new V40 smartphone is expected to “boost sales in the fourth quarter” and help the loss-making mobile business as it seeks to return to profit, LG Electronics said.
Meanwhile, sales of high-end OLED TV products have been a big hit for the home entertainment business after it cut prices to improve their competitiveness.
However, increasing competition in the high-end television set market complicated the company’s earnings outlook, analysts said, adding that profit growth could also be limited due to a saturated smartphone market.
“It’s going to get difficult for LG if it keeps booking losses in its mobile unit, unless it does something extreme such as making a mega-hit product or laying off staff to restructure its business,” said analyst Lee Jong-wook at Samsung Securities.
LG’s share price fell 3.6 percent on Thursday after the results were released, compared with two percent fall in the broader market.