LG's profit soars, sales rise

2009-10-21 14:07

Seoul - LG Electronics said third-quarter net profit soared, helped by earnings from its display affiliate, while revenue rose on record sales of flat screen TVs and mobile phones.

The company, the world's second-largest manufacturer of flat screen TVs, earned $684m in the three months ended September 30, it said in a regulatory filing Wednesday. It posted net profit of 24.9bn won a year earlier.

Sales during the quarter rose 14% to 7.87 trillion won from 6.89 trillion won a year earlier. The sales figure was the highest ever for a third quarter, the company said.

But looking ahead, LG Electronics said it expects modest sales growth in the fourth quarter. It said lower prices for TVs and mobile phones and an increase in marketing costs and investment in research and development would likely hurt profitability compared with the previous quarter.

Boosting the bottom line was a 368bn won "equity method" gain from overseas subsidiaries and its display affiliate, the company said in a release. An equity method gain or loss is the positive or negative earnings contribution from related companies. The company also booked a foreign exchange gain of 71bn won.

LG Electronics owns a 37.9% stake in LG Display, the world's second-largest manufacturer of liquid crystal displays used in flat screen televisions and other products. LG Display said last week that net profit soared on record sales and cost cuts amid a recovery in prices for flat panels.

Seoul-based LG Electronics said that sales at its home entertainment company rose 24% to 4.93 trillion won amid "rising demand for flat panel TVs amid the peak season". LG, maker of the Borderless flat panel TV, sold a quarterly record 4.01 million liquid crystal display TVs, said company spokesman Jang Joon-kyu.

LG Electronics is also the world's third-largest seller of mobile phones after Finland's Nokia and South Korea's Samsung Electronics.

The maker of the Cookie, New Chocolate and Crystal mobile phones, said sales increased 37% in the third quarter from the same period last year to a record 31.6 million handsets.

- AP