Sales increased by 4% for LG Home Appliance & Air Solution Company

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LG washing machine with Twin Wash system.
LG washing machine with Twin Wash system.
LG washing machine with Twin Wash system.

According to the data communicated by LG Electronics, the company achieved strong operating profit margin in its Home Appliance & Air Solution Company, contributing to an overall net profit of KRW 124.8 billion (USD 106.76 million) for the third quarter of 2015. Amid an increasing competitive pressure in the TV and smartphone sectors, the third-quarter sales rose by 0.7 percent from the second quarter to KRW 14.03 trillion (USD 12 billion), while operating profit increased from the previous quarter to KRW 294 billion (USD 251.5 million). Considering the different business areas in detail, the LG Home Appliance & Air Solution Company reported a strong quarter with a 4 percent increase in sales to KRW 4.15 trillion (USD 3.55 billion) and an operating profit of KRW 245.6 billion (USD 210.1 million), an increase of 420 percent from the same period of the year before. Operating profit for refrigerators improved as a result of strong sales of premium models in North America and Korea while the new Twin Wash system contributed to improve the profit margins in the washing machine business. According to the company, the fourth-quarter results are likely to be impacted by the effects of unfavorable exchange rate and seasonality.
As regards to the consumer electronics, the LG Home Entertainment Company reported third-quarter revenue of KRW 4.29 trillion (USD 3.67 billion), an increase of 9 percent quarter-on-quarter due to solid sales in UHD and OLED TVs in markets such as North America, Latin America and CIS. “Profitability – explains the company in a official note – also increased from the previous quarter as a result of improvements in product mix and cost structure. With continuing soft global TV demand, LG plans to bolster its profitability by increasing its marketing focus in the premium segment while continuing to improve its cost competitiveness”.
Besides, the LG Mobile Communications Company reported global shipments of 14.9 million smartphones, a 6 percent increase from the previous quarter. Despite a 12 percent sales increase in North America, overall revenues of KRW 3.38 trillion (USD 2.89 billion) were 7 percent lower quarter-on-quarter and decreased 21 percent year-on-year “due in large part – said the company – to weaker demand for high-end devices in Korea. LG expects the launch of the advanced V10 and price-competitive Nexus 5X smartphones in the fourth quarter to improve the overall product mix”.