LG Electronics Inc said third-quarter net profit soared on earnings from overseas affiliates while sales rose on demand for flat screen TVs and mobile phones.
The company, the world’s second-largest manufacturer of flat screen TVs, earned 807.2 billion won (US$684 million) in the three months ended on Sept. 30, it said in a regulatory filing yesterday. It posted net profit of 24.9 billion won a year earlier.
Sales during the quarter rose 14 percent 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 368 billion won “equity method” gain from overseas subsidiaries and affiliates, 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 71 billion won.
LG Electronics owns a 37.9 percent stake in LG Display Co, 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 percent to 4.93 trillion won amid “rising demand for flat panel TVs amid the peak season.”
LG sold a quarterly record 401,000 liquid crystal display TVs, company spokesman Jang Joon-kyu said.
LG Electronics is also the world’s third-largest seller of mobile phones after Finland’s Noki Corp and South Korea’s Samsung Electronics Co.
Mobile phone sales increased 37 percent in the third quarter from the same period last year to a record 31.6 million handsets, LG Electronics said.
Shares in LG Electronics, which released earnings during early afternoon stock trading, rose 1.7 percent to close at 120,500 won.
The company’s shares have risen 61 percent so far this year.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
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