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LG Electronics reports decent Q3

Oct 31,2019
LG Electronics posted its best third-quarter results in a decade.

The firm said Wednesday its sales in that quarter were 15.7 trillion won ($13.15 billion) and its operating profit was 781.4 billion won.

That is the best third-quarter operating profit since 2009.

Sales in the July-September period inched up 1.8 percent on-year while the operating profit increased 4.4 percent compared to the same period in the previous year.

Strong performance in the home appliance division helped lift the results.

LG Electronics said its home appliance and air solution unit reported third-quarter sales of 5.33 trillion won, driven largely by strong demand in North America, Europe, the Middle East and Asia. The operating income of the unit was 428.9 billion won, a 3.8 percent increase on-year on cost reductions and lower raw material prices.

Its mobile communications division posted 1.52 trillion won revenue in the third quarter. Its operating loss stood at 161.2 billion won, but the loss was far less than the previous quarter’s 313 billion won loss.

As the company relocated its mobile manufacturing from Pyeongtaek, Gyeonggi, to Vietnam earlier this year, costs have fallen, which is seen to have contributed to the reduced loss. But the mobile communications division has been suffering losses for 18 consecutive months since the second quarter of 2015.

Expensive 5G equipment and low demand for 5G handsets contributed to the loss, according to a spokesperson from LG Electronics during a conference call on Wednesday.

“But we are forging strategic partnerships with related operators, and believe we could pioneer the market next year before Apple enters the 5G market.”

Restrictions against Huawei in Europe will set the stage for LG Electronics to raise its presence in that market, the spokesperson argued. The company said it will expand original development manufacturing of low- to mid-priced smartphones.

BY JIN MIN-JI [jin.minji@joongang.co.kr]