Home Appliance Industry Soars in Q3 Despite COVID-19 Challenges

Samsung Electronics Reports Operating Profit of 12.3 Trillion Won... Largest in 7 Quarters
LG Electronics Records Q3 Best Performance with 960 Billion Won

On the 8th, Samsung Electronics announced that its consolidated operating profit for the third quarter of this year was preliminarily estimated at 12.3 trillion won, an increase of 58.1% compared to the same period last year. The photo shows the Samsung Electronics building in Seocho-gu, Seoul. Sales increased by 6.45% to 66 trillion won compared to the same period last year. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Dongwoo Lee] Samsung Electronics and LG Electronics recorded record-breaking strong performances in the third quarter of this year. The prolonged COVID-19 pandemic has positively influenced the demand for home appliances such as TVs and smartphones due to the rise of non-face-to-face culture. The semiconductor business also benefited from emergency orders triggered by Huawei, positively impacting quarterly results.

Samsung Electronics: Smartphones Push, Home Appliances Pull

Samsung Electronics posted preliminary results for the third quarter with sales of 66 trillion KRW and operating profit of 12.3 trillion KRW. Compared to the same period last year, sales increased by 6.45% and operating profit rose by 58.1%. The third-quarter operating profit consensus estimated by the financial investment industry was 10.28 trillion KRW, so Samsung's quarterly operating profit exceeding 10 trillion KRW is the first time in seven quarters since Q4 2018 (10.8 trillion KRW).

Operating profit by business segment is estimated as follows: semiconductors 5.5 trillion KRW, IT & Mobile (IM) 4.6 trillion KRW, Consumer Electronics (CE) 1.4 trillion KRW, and Display (DP) between 200 billion and 500 billion KRW. The industry evaluates that Samsung's strong third-quarter performance was driven by robust sales in the set business sectors such as smartphones and home appliances.

The IT & Mobile division's operating profit was boosted by strong performances from smartphones like the Galaxy Note20 series and Galaxy Z Flip2. The Consumer Electronics division's operating profit is estimated to have roughly doubled compared to the previous quarter, reaching the mid-1 trillion KRW range. This is interpreted as a result of significantly increased online sales demand for TVs and refrigerators due to the prolonged COVID-19 pandemic and reduced marketing expenses.

The Device Solutions (DS) division, responsible for the semiconductor business, is estimated to have slightly decreased compared to the previous quarter due to price declines in DRAM and NAND flash. The Display division's operating profit is analyzed to have improved as the LCD panel price increase reduced the LCD deficit compared to the previous quarter.

[Image source=Yonhap News]

LG Electronics: Key Role of TVs and Hygiene Appliances Drives Sales

LG Electronics achieved record third-quarter results with sales of 16.9196 trillion KRW and operating profit of 959 billion KRW, representing increases of 7.8% and 22.7% respectively compared to the same period last year.

By business segment, operating profits were approximately 650 billion KRW for Home Appliances & Air Solution (H&A), 290 billion KRW for Home Entertainment (HE), and 120 billion KRW for Business Solutions (BS), while Mobile Communications (MC) recorded an estimated operating loss of 155 billion KRW and Vehicle Component Solutions (VS) a loss of 55 billion KRW.

The home appliances and home entertainment segments, which drove the third-quarter results, saw a surge in sales of premium and hygiene appliances as people spent more time at home due to the prolonged COVID-19 pandemic, according to industry analysis.

The MC division also appears to have reduced its losses in the third quarter. The launch of the new Velvet model in Q3, along with strong sales of mid-to-low-end products in the U.S. and other markets, and some reflected benefits from Huawei sanctions in Latin America contributed positively. Previously, the MC division recorded operating losses of 230 billion KRW in Q1 and 200 billion KRW in Q2.

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