LG Reports Higher Sales, Lower Net ProfitSeoul, South Korea — LG Electronics reported higher revenues but lower net profit in its third quartered, ended Sept. 30. 10/24/2013 07:57:00 AM Eastern
Seoul, South Korea — LG Electronics reported higher revenues but lower net profit in its third quartered, ended Sept. 30.
Third-quarter consolidated revenues were 13.89 trillion Korean won (KRW) or $12.5 billion, compared with the prior year’s third quarter of 13.28 trillion KRW.
Net profits were 109 billion KRW compared with the prior year’s 165 billion KRW.
However, LG saw a 27 percent increase in third-quarter operating profit to 217.8 billion KRW ($196.34 million) compared with the same period last year.
LG reported that while competitive conditions in the TV sector and an unfavorable foreign currency exchange rate affected overall revenues compared with the 2012 third quarter, sales of mobile devices increased year over year by 24 percent.
The LG Home Entertainment Company reported revenues of 5.01 trillion KRW ($4.5 billion), a 7 percent decline from the same period a year ago, reflecting slower global TV demand and lower selling prices.
Operating profit of 124.4 billion KRW ($111.68 million) increased both year over year and quarter over quarter as a result of more efficient management of operating and marketing expense, LG said. As it enters the holiday selling season, LG plans to expand global sales of premium products such as OLED TVs and Ultra High-Definition TVs while continuing to carefully manage costs.
For the LG Mobile Communications Company’s third quarter, revenues increased by 24 percent compared with the same quarter a year ago to 3.05 trillion KRW ($2.75 billion). The company shipped 12 million smartphones in the third quarter, but profitability and average selling price were affected by increased competition and higher marketing investments.
LG plans to focus on increasing sales of new premium products such as the LG G2 smartphone during the peak holiday season as well as maximizing 3G and midtier mass devices such as the L II series and F series.
In its Home Appliance Company, LG recorded revenues of 2.97 trillion KRW ($42.68 billion), up 3 percent from the previous year largely due to the positive reception of its new washing machines and refrigerators. LG appliance sales increased in North America and China but slowed in developing markets, the company said.
Despite higher overall revenues and improved cost structure, third-quarter operating profit decreased from the same period last year to 109.2 billion KRW ($498.17 million) primarily due to unfavorable foreign exchange movements.