LG bounces back with solid smartphone sales in Q3
Sales of LCD TVs and home appliances dragged down the company's results, though
LG Electronics bounced back with better-than-expected profit in the third quarter thanks to robust high-end smartphone sales offsetting weak demand for LCD TVs and home appliances.
For the quarter ended Sept. 30, net income swung to a profit of 157 billion won ($140 million) from a loss of 414 billion won a year earlier. Operating profit totalled 221 billion won, compared with a loss of 32 billion won in the year-earlier period, thanks to strong sales of LTE smartphones including the Optimus series in South Korea, Japan and the U.S., LG said during its earnings conference in Seoul on Wednesday.
Revenue fell 4% to 12.38 trillion won due to the continuing decline of feature phone sales, and sluggish demand for home appliances and air conditioning.
LG sold 7 million smartphones in the quarter.
It shipped 500,000 of its flagship Optimus G phones, mostly in South Korea, where it launched in September, and Japan, where it launched in October. It shipped about 50,000 of them to the U.S. ahead of the phone's launch there, said Yoon Bu-hyun, a vice president of LG's Mobile Communications division.
The Optimus G will materialize in the U.S. in the fourth quarter, said Marcello Ahn, an analyst with Nomura based in Seoul, in a research note. Both AT&T and Sprint will carry a quad-band Optimus G on their LTE networks starting in November. Pre-orders for the Optimus G are estimated at around 1 million units with a price of around $500 before subsidy.
The Seoul-based company will also release the Optimus Vu:2, a 5-inch "phablet" or phone-tablet hybrid, in South Korea next month.
Rival LTE smartphones in the market include Apple's iPhone 5, Samsung Electronics' Galaxy S III and Nokia's Lumia series.
Besides its own phone LG, the fifth largest handset manufacturer, is expected to make a Nexus smartphone for Google, which will be unveiled next Monday. LG executives declined to comment on the phone.
LG Electronics' sister company LG Display also supplies U.S. tech giants including Apple and Google. LG Display is reported to supply 70% of the display panels for Apple's iPad mini, according to JJ Park, an analyst with J.P. Morgan based in Seoul.
LG Innotek, part of LG Electronics, is also a major supplier of camera modules for the iPad mini.
For 2012, iPad mini-related component sales are expected to contribute roughly $150 million, or about 3% of LG Innotek's total sales, Park said in a research note.
Operating profit at LG's home entertainment division, which sells TVs and PCs, was 89 billion won.