LG Electronics posted 781.4 billion won in operating profit in the third quarter of this year, recording the highest-ever quarterly results.
The company is highly likely to surpass 20 trillion won in annual sales in the home electronics sector alone this year, becoming the world’s largest home electronics company.
LG Electronics said on Oct. 30 that it posted 15,770.7 billion won in sales and 781.4 billion won in operating profit in the third quarter. During this period, its sales rose 1.8 percent on year, setting a new quarterly high, while its operating profit climbed 4.4 percent, reaching the highest quarterly point since 2009.
The growth driver was the Home Appliance & Air Solution (H&A) Business Division in charge of washing machines and refrigerators. In the third quarter, the division recorded 5,330.7 billion won in sales. It was the first time that the division’s quarterly sales exceeded 5 trillion won. Sales of household appliances such as air purifiers, clothing managers and washing machines increased in North America, Europe and Asia. Its operating profit stood at 428.9 billion.
In particular, the H&A Business Division posted 16,899.4 billion won in cumulative sales in the first three quarters of this year. It is expected to post more than 20 trillion won in annual sales for the first time this year. Whirlpool is the only home appliance maker in the world with annual sales of over 20 trillion won. LG Electronics emerged as the world's No. 1 home appliance company in the first half of this year.
The Smartphone Business Division drastically reduced its operating loss from 313 billion won in the second quarter to 162 billion won in the third quarter. The cut is attributable to a bold cost-cutting strategy and the release of the LG V50 with a dual screen. Production cost plummeted as the division moved smartphone production from Korea to Vietnam and Brazil. Industry observers say that LG Electronics will be able to expand its presence in the smartphone market as the company released the LG V50S with an improved dual screen last month. The new model has been well-received.
The Home Entertainment (HE) Business Division posted 318 billion won in operating profit, backed by a rise in OLED TV sales, its flagship product. Its operating profit surged by more than 100 billion won from the previous quarter. Its operating margin jumped 8.2 percent in the Middle East and Latin America as sales of premium products including OLED TVs swelled. The BS Business Division considered a minor business also stood out in the third quarter. Its sales were 698.7 billion won and its operating profit, 66.8 billion won. Operating profit surged 90.3 percent on year as LED and large signage sales grew and solar module sales increased in the United States and Europe.