LG Electronics swings back into the red

LG Electronics posted operating losses of 32 billion won ($29.57 million) in the third quarter, swinging into the red for the first time this year.

In its quarterly earnings report, the company said it recorded 12.9 trillion won in sales, a 4 percent decrease from the same period last year, largely due to its sluggish sales of mobile phones.

The company posted operating losses of 185.2 billion won and 245.7 billion won in the third and fourth quarters of last year, respectively, but managed to get back into the black this year.

LG’s mobile communications company posted an operating loss of 139 billion won -- recording losses in the sector for six consecutive quarters -- and 2.76 trillion won in sales, down 14.9 percent from the previous quarter.

Although the slump in smartphone sales was blamed for its lackluster performance, the world’s third-largest mobile phone maker said it will focus on Long Term Evolution handsets that run on fourth-generation communication networks, hoping they will help see a turnaround by next year.

Starting in Korea, the U.S. and Japan this year, LG plans to launch LTE phones in Europe in the latter half of next year following the establishment of the network.

“We have already supplied up to 150,000 units of LTE mobile phones in the first 10 days here and the sales figures in North America and Japan are projected to spike in the final quarter,” said Jeong Do-hyun, LG’s chief financial officer during its quarterly earnings conference.

Revenue for the firm’s home entertainment company decreased 7 percent compared to last year to 5.37 trillion won while it shipped 6.8 million flat panel TVs in July-September -- the largest shipment recorded in the third quarter.

Its home appliance company posted quarterly sales of 2.7 trillion won, a 1-percent increase from the previous year, and the air conditioning and energy solution company’s revenue grew by 11 percent year-over-year to reach an operating profit of 1 billion won due to increased sales in the Middle East and Latin America.

In contrast to its falling profit figure, stocks of LG Electronics closed at 77,500 won per share, up 2.24 percent from Tuesday.

By Cho Ji-hyun (sharon@heraldcorp.com)