SEOUL, Oct. 30 (Korea Bizwire) — LG Electronics Inc. said Wednesday its third-quarter net profit dropped 30.5 percent from a year earlier due to its lackluster mobile business.
The South Korean electronics maker said its net earnings stood at 345.7 billion won (US$296 million) in the July-September period, compared with 497.1 billion won a year ago.
Its sales rose 1.8 percent on-year to 15.7 trillion won, and its operating profit gained 4.4 percent to 781.4 billion won in the third quarter, the largest quarterly result since 2009, the company said.
The home appliance and air solution division earned 5.3 trillion won in sales, the largest third-quarter revenue, on the back of strong sales at home and abroad.
Its TV business posted 3.9 trillion won in sales, with the premium OLED lineup boosting its overall profitability.
The mobile communication division logged 1.5 trillion won of revenue but booked 161.2 billion won of operating losses on weak demand in the global market and rising marketing costs for new phones.
The smartphone business marked its 18th consecutive quarterly loss, but the company cut losses from the second quarter as it moved its Korean smartphone factory to Vietnam in October.
In the fourth quarter, LG Electronics said the business environment will be unfavorable at home and abroad in the offseason and that there will be lingering uncertainties in global trade.
The company said it will expand its premium lineup of home appliances and OLED TVs to enhance profitability.
The tech firm said it will step up marketing for its dual screen smartphones to target the premium handset market in the peak season, expecting reduced operating losses following its factory relocation to Vietnam.
LG said it will step up 5G marketing in South Korea, the United States and Japan, while seeking to expand its presence in Europe to benefit from Huawei’s struggle amid a U.S. ban.
“Although the 5G smartphones launched this year were not enough to boost profitability due to the high parts costs and lack of demand, we expect to expand our presence in the 5G (smartphone) market in 2020,” a company official in charge of the mobile communication division said during a conference call.
“LG has been collaborating with Qualcomm on cost-effective 5G smartphones to meet varying customer demands.”
The company said it will expand its partnerships with content providers and game developers to boost sales of its dual-screen 5G phone lineup, which is seen as a practical answer to foldable phones by Samsung Electronics and Huawei Technologies.
Shares in LG Electronics slid 0.72 percent to 68,500 won on the Seoul bourse, underperforming the broader KOSPI’s 0.59 percent decline. The earnings report was released shortly before the market closed.