Facing tough competition in the world’s mobile and electronics markets, tech giant LG Electronics saw its profit drop by a whopping 37 percent in the July-September period as losses widened in its flagship mobile business unit.
The electronics firm said in its regulatory filings that it earned 14.3 trillion won ($12.5 billion), down 5 percent year on year, in the third quarter. The company reported 294 billion won in profit, down 37 percent on-year.
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An employee enters LG Electronics`s head office in Seoul. (Yonhap) |
The major cause for the revenue and profit declines stemmed from the company’s mobile communications business division which posted 3.4 trillion won in sales, down 21 percent from the same period last year, and an operating loss of 77.6 billion won, down 11 percent in the third quarter last year.
The company said it sold 14.9 million smartphones in the third quarter, 9.7 million of which were LTE-support smartphones, the quarterly highest for LG.
LG attributed the heated competition in the world’s handset market to the sagging performance of its mobile business.
“LG will try to reinvigorate the mobile business with its new smartphones, including the V10, and the Nexus 5X equipped with Google’s latest Android 6.0 operating system,” an official from the Seoul-headquartered tech firm said.
The profit of the firm’s home entertainment business unit increased 9 percent year-on-year to 37 billion won even though its revenue dropped to 4.29 trillion won in the three-month period from 4.51 trillion won earned in the same period last year.
The business division was able to maintain a stable profit due largely to its efforts to reduce production cost for the high-end organic light-emitting diode and ultra-high definition TVs.
Both profit and revenue of the firm’s home appliance and air solution business, meanwhile, improved thanks mainly to the firm’s industry leading products including fridges for kimchi, and the Twin Wash washer featuring two tubs -- one on the top and the other on the bottom.
The HA business unit posted 4.2 trillion won in sales up 4 percent on-year, and 246 billion won in profit, up 4.7 percent on-year
The vehicle components business unit of the company remained in the red in the two consecutive quarters with its third-quarter operating loss standing at 1.5 billion won. Its sales grew 6 percent on-year to 479 billion won. The company explained the operating loss of the fledgling division for vehicle parts was due to R&D investments.
In an investment relations conference held at its Seoul headquarters on Thursday, LG pledged that it would try to boost business operations for vehicle components by securing new supply deals with automakers such as GM and taking over companies.
By Kim Young-won (
wone0102@heraldcorp.com)
