LG Electronics posts record Q3 revenue despite challenges

LG Electronics has reported its financial performance for the third quarter of 2024, revealing record revenues for this period despite global economic challenges.

The company announced consolidated revenue of AUD $24.23 billion and an operating profit of AUD $821.54 million. This revenue is noted as the highest ever for a third quarter, while the operating profit is the fourth highest in LG's history.

LG cited several external factors impacting its financial performance, including delays in market demand recovery and ongoing geopolitical conflicts. These issues have contributed to increased global shipping expenses and heightened costs.

Despite these challenges, LG has recorded year-over-year revenue growth for four consecutive quarters. This growth is attributed to the company's efforts in upgrading its business portfolio, transforming business methods and models, and expanding its B2B operations. These strategic initiatives have helped to offset the increased costs, allowing the company to maintain strong operating profits.

Going forward, LG aims to further expedite its business transformation, focusing on home appliance subscriptions, direct-to-consumer sales, and volume zone product sales. There is also an emphasis on steady growth in the B2B sector and the expansion of platform-based content and service businesses.

The LG Home Appliance & Air Solution Company reported third-quarter revenue of AUD $9.12 billion and an operating profit of AUD $576.38 million. Compared to the third quarter last year, revenue increased by 11.7%, and operating profit rose by 5.5%. The growth of subscription business models and the B2B HVAC business have driven revenue expansion, despite the delayed recovery in global appliance demand.

LG anticipates an improvement in market conditions in the fourth quarter, as indicated by positive economic indicators and interest rate cuts. The company plans to diversify its home appliance lineup and pricing strategies to meet increasing demand in emerging markets, while also focusing on expanding new businesses such as subscriptions and D2C sales to sustain revenue growth.

The LG Home Entertainment Company recorded third-quarter revenue of AUD $4.09 billion with an operating profit of AUD $53.99 million. Revenue rose by 5.2% year-over-year, mainly due to increased shipments in Europe, a key market for OLED TVs. Although there was a significant cost increase due to rising LCD panel prices, the growth of the webOS-based content and services business helped mitigate the impact on profits.

The LG Vehicle Component Solutions Company posted third-quarter revenue of AUD $2.85 billion and an operating profit of AUD $1.2 million. Revenue showed an increase compared to the same period last year but experienced a slight decrease from the previous quarter, attributed to a slowdown in electric vehicle demand. Operating profit was affected by increased R&D expenses for software-defined vehicle technology and investments for mass production of order volumes.

For the LG Business Solutions Company, third-quarter revenue was recorded at AUD $1.53 billion, and an operating loss of AUD $84.03 million. Revenue increased year-over-year due to a rise in sales of strategic products like gaming monitors and LED signage. However, the operating loss widened due to rising LCD panel prices, increased logistics costs, intensified competition, and higher investments in new business areas.

LG has also decided to discontinue its battery pack business following a recent board resolution. From the third-quarter earnings report, the related revenue and operating profit will be classified as discontinued operations in the financial statements, leading to adjustments in past figures.