LG Electronics third-quarter profit jumps on strong sales of TVs, appliances

SEOUL (Reuters) - South Korea’s LG Electronics Inc said on Thursday its third-quarter operating profit rose 82 percent from a year earlier, as healthy sales for its appliances and televisions offset another loss for the mobile division.

July-September profit for the world’s second-largest TV maker climbed to 516 billion won ($459 million) on a 15.1 percent rise in revenue, in line with guidance given by the company earlier this month.

The jump in profits reflected “strong profitability in home entertainment and appliances despite the gloomy business environment resulting from increasing international trade concerns,” LG said in a statement.

The firm forecast fourth-quarter earnings would fall quarter-on-quarter but continue to show stable profitability.

Operating profit for the appliances division jumped 26 percent from a year earlier to 425 billion won, thanks to sales of high-margin products such as its premium-label refrigerators and washers.

Sales of high-end televisions, including those with organic light-emitting diode (OLED) screens, helped earnings at its TV division rise 20 percent to a quarterly record of 458 billion won, with operating margin of 9.9 percent.

But the firm’s mobile division reported a 375 billion won loss, its tenth consecutive quarterly loss. It was hit by declines in sales of its flagship G6 phones released in the first half of the year, and higher spending on marketing as rivals launched new products.

LG released its latest premium V30 model toward the end of the quarter so most of those sales have yet to be reflected in earnings.

The electronics giant may face restrictions on exports from its Thailand and Vietnam plants to the United States going forward, following a ruling this month by the U.S. International Trade Commission that surging imports of large residential washing machines harmed domestic producers.

Seoul-based analysts, however, said the impact could be limited, as the commission’s ruling excluded washing machines made in South Korea, which are already subject to duties, and LG is set to open a new factory in Tennessee in late 2018.

($1 = 1,124.0300 won)