LG swings to profit in Q3 with surprise mobile boost

LG Electronics reports a third quarter net profit of 157 billion won (US$138.57 million), thanks to better than expected earnings from its mobile handsets.

LG Electronics reports a net profit of 157 billion won (US$138.57 million) for the third quarter of 2012 as its mobile and home appliance businesses offset overall year-on-year decline in sales.

In its statement Wednesday, the South Korean electronics company said this is the third consecutive quarter which it has had a positive net income. It noted that this quarter saw "significant improvements" compared to the same period last year during which it registered a net loss of 414 billion won (US$374.8 million).

However, its third-quarter revenue fell 4 percent year-on-year to 12.38 trillion won (US$10.9 billion) which the company blamed on a decline in feature phone sales and slows sales of IT products.

Mobile, home applicances gain in operating profit

LG Q3 2012 results

LG's earnings release for the third quarter detailed how its four business segments contributed to the company's earnings.

The mobile communications business unit saw the biggest jump in operating profit, from a loss of 139 billion won (US$125.9 million) last year to 22 billion won (US$19.9 million) this year. It also saw the greatest quarterly growth at 5.4 percent as it brought in 2.4 trillion won (US$2.2 billion).

Operating profit for home appliances grew from 74 billion won (US$67 million) in the same period last year to 129 billion won (US$116.8 million). It was the only business unit which saw year-on-year growth in sales at 6.4 percent, bringing in 2.9 billion won (US$2.6 trillion).

Sales of home entertainment products, such as TV sets, dropped 4.4 percent year-on-year to reach 5.5 trillion won (US$5 billion). 

The air conditioning and energy solution business unit's sales dropped 3.1 percent year-on-year to reach 974 billion won (US$881.9 million). The business unit saw the biggest drop in quarterly sales at 33.9 percent. 

LG's financial results contrasts with its Korean rival Samsung which reported a revenue of 52 trillion won (US$46.7 billion) in the third quarter of 2012.

In its outlook for the fourth quarter, LG said it expects demand for mobile phones to increase with peak season but competition will intensify. It plans to maximuze its revenue with aggressive marketing activities for competitive products such as the Optimus G and Optimus Vu:2.

According to reports, LG is manufacturing the next Nexus phone , the flagship line for the Android platform, which Google will unveil in an event next Monday in the U.S. .