SEOUL, Oct. 24 (Xinhua) -- South Korean tech giant LG Electronics turned into the black in the third quarter due to brisk sales of its Optimus smartphones and an increase in LCD TV sales.
Consolidated operating profit, which includes profits from its units, reached 220.55 billion won (200 million U.S. dollars) during the July-September period, turning around from a loss of 31. 89 billion won for the same period of last year, according to an e- mailed statement Wednesday.
The turnaround came as LG's handset business shifted into the black thanks to healthy sales of LTE smartphones and Optimus L- Series. The company's TV business showed stable performance on continued rise in LCD TV sales, contributing to the operating outperformance.
Sales contracted 4 percent on-year to 12.38 trillion won in the three months ending Sept. 30 due to a reduction in air-conditioner sales during the off-season period, but net income amounted to 157. 12 billion won, shifting into the black from a loss of 413.92 billion won a year before.
The Mobile Communication (MC) division that makes handsets and smartphones posted an operating profit of 21.5 billion won in the third quarter, turning into the black from a loss of 57 billion won in the previous quarter. Revenues increased 5 percent on- quarter to 2.45 trillion won.
The turnaround was attributable to fast growth of handset sales that reached 14.4 million units during the third quarter, up 10 percent from three months before. Smartphone sales, including Optimus LTE2 and L-series, jumped over 20 percent, and those accounted for around half of overall handset sales in the third quarter.
Market watchers expected LG's smarphone sales to remain on the rise in the fourth quarter helped by the launch of its new flagship smartphone Optimus G. "LG Electronics will keep its stable operating performance in the fourth quarter thanks to the active sales of Optimus G. Smartphone shipment by LG is expected to reach 9 million units in the fourth quarter, among which Optimus G sales will reach 1 million units," said Sophia Kim, an analyst at Woori Investment & Securities.
The Home Entertainment (HE) business, which produces TVs, saw its operating profit of 88.6 billion won in the third quarter, offsetting sluggish demand in the global TV industry. The stable performance was ascribable to an increase in LCD TV sales that expanded 10 percent in the third quarter from the prior quarter.
LG said that it planned to increase sales of LCD TVs in the fourth quarter by expanding marketing of CINEMA 3D Smart TVs and enhancing its premium brand positioning with the new Ultra HD TV.
The Home Appliance (HA) division that makes washing machines and refrigerators logged an operating profit of 128.5 billion won during the July-September period, slightly down from a profit of 165 billion won three months before.
The decline came with global appliance demand stagnant, but the fall was limited due to strong sales in the United States and emerging markets with the launch of customized products in the regions. LG said it planned to boost appliance sales in the fourth quarter with additional marketing promotions and new model launches.
The Air Conditioning & Energy Solution (AE) business posted an operating profit of 11.8 billion won in the third quarter, down from a 70 billion won profit for the second quarter, due to weak demand for air conditioners during the off-season period.