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Life is good for LG, selling a record-breaking 16.8 million Android phones
Life is good for LG. How good? 450$ million dollars in the bank good. The company that was once synonymous with home appliances has reinvented itself into a smartphone manufacturing juggernaut. LG Electronics has just announced their third quarter earnings which saw an operating profit of $450 million, in big part thanks to their record breaking 16.8 million Android phone sales. The company has doubled their year over year profits and isn’t expecting to slow down anytime soon. They announced that they expect to strengthen their positioning in the budget smartphone market with its L Series III models, despite the landscape becoming more competitive.
LG is doing well in the component business as well, spurred by the good performance of its mid-range and high-end devices, including the G3 and its variants, G3 Beat and G3 Screen. LG Display recently announced good earnings as well, while LG Electronics recently announced its first smartphone processor designed in house, the Nuclun.
On thursday we’ll find out exactly how much of the pie LG has taken away from their Korean counterpart Samsung. Samsung is set to release their third quarter earnings and it’s expected to be bad, and even Samsung has admitted that it will be worryingly bad.
What can Samsung learn from LG?
SEOUL, Oct. 29, 2014 — LG Electronics (LG) announced unaudited third quarter consolidated revenues of KRW 14.92 trillion (USD 14.54 billion), an increase of 7.4 percent year-over-year, and operating profit of KRW 461.3 billion (USD 449.61 million), more than double the figure from the same period a year ago. LG’s earnings reflected strong performance from its mobile business which saw record smartphone sales in the third quarter with sales of 16.8 million units.
The LG Home Entertainment Company reported third-quarter revenues of KRW 4.71 trillion (USD 4.59 billion), a slight decline of 3 percent from the same period last year. Operating profit of KRW 130.5 billion (USD 127.19 million) increased 5 percent from the same quarter last year due to better product mix. Sales of LCD TVs increased year-over-year in regions such as North America, Europe, Asia and the Middle East. LG expects sales of 4K Ultra HD TVs and commercial digital signage products to grow, while market demand for monitors and AV products is expected to slow.
The LG Mobile Communications Company shipped a record-breaking 16.8 million smartphones in the third quarter, an increase of 39 percent year-on-year and 16 percent more units than the previous quarter. Sales of KRW 4.25 trillion (USD 4.14 billion) and operating income of KRW 167.4 billion (USD 163.16 million) were the highest in the company’s history since the third quarter of 2009. Building on its momentum and two consecutive profitable quarters, LG expects to strengthen its positioning in the smartphone market with its G Series and L SeriesIII models despite the landscape becoming more competitive.
The LG Home Appliance Company reported revenues of KRW 2.91 trillion (USD 2.84 billion), a slight decrease from the same period the year before, despite improved sales in Korea, Europe and developing markets such as the Middle East and South East Asia. Greater competition in North America and unfavorable foreign currency exchange rates resulted in a lower third–quarter operating profit of KRW 51.8 billion (USD 50.49 million). LG expects profitability to increase in the fourth quarter with an expanded home appliance product portfolio and improved cost structure.
The LG Air Conditioning & Energy Solution Company reported revenues of KRW 925.6 billion (USD 902.14 million), a 5 percent decline from a year ago. An operating loss of KRW 2.5 billion (USD 2.44 million) was primarily due to weak demand in residential air conditioners in Korea related to weather conditions, which offset steady growth in the Middle East and Latin America. LG expects overseas sales to improve with more customized and higher energy efficient systems while it targets the growing construction and civilian industries in Korea with its commercial products.[/press]