LG Electronics Achieves Record Q3 Performance with Operating Profit Near 1 Trillion Won (Comprehensive)

[Asia Economy Reporter Ki-min Lee] LG Electronics announced its preliminary results for the third quarter of this year on the 8th, with sales of 16.9196 trillion KRW and operating profit of 959 billion KRW.

Compared to the same period last year, sales and operating profit increased by 7.8% and 22.7%, respectively. LG Electronics' performance slightly exceeded the consensus estimated by the financial investment industry, with both sales and operating profit marking the highest ever for the third quarter.

It is estimated that pent-up demand following the COVID-19 pandemic contributed to strong sales of LG Electronics' home appliances and TVs in the third quarter.

Furthermore, the increase in untact (contactless) sales led to a reduction in marketing expenses, which is also analyzed to have positively impacted the performance improvement.

In the Home Appliance & Air Solution (H&A) division, which is responsible for home appliances, operating profit is estimated to have exceeded 600 billion KRW, driven by increased sales of new and hygiene appliances such as clothes dryers, stylers, dishwashers, and premium appliances like refrigerators.

The H&A division completely broke the 'high in the first half, low in the second half' performance trend in the third quarter, and is expected to achieve an annual operating profit exceeding 2 trillion KRW.

The Home Entertainment (HE) division, responsible for the TV business, is also expected by the financial investment industry to have surpassed 200 billion KRW in operating profit, as demand for premium TVs such as OLED and NanoCell increased due to the normalization of 'Jipkok' (a neologism meaning staying at home) lifestyle.

The MC division, responsible for the smartphone business, is estimated to have reduced its operating loss due to the launch of the new smartphone Velvet, recovery of demand in the U.S. market, and some spillover benefits from Huawei.

With the normalization of operations at global automakers, which had been sluggish in the first half, and the revival of automobile sales in the third quarter, the performance of the Vehicle Components (VS) business division also improved compared to before.

LG Innotek, an electronic components company included in the consolidated group, also maintained a slight positive earnings trend.

The financial investment industry expects LG Electronics' earnings in the fourth quarter of this year to decrease compared to the third quarter but increase compared to the same period last year (101.8 billion KRW). KB Securities revised its forecast for LG Electronics' fourth-quarter operating profit upward from the initial estimate of 447.1 billion KRW to 551.6 billion KRW.

This content was produced with the assistance of AI translation services.