Company Achieves Highest Third-Quarter Revenue and Sustains Year-Over-Year Growth for Four Consecutive Quarters
LG Electronics Inc. (LG) today announced its third-quarter 2024 consolidated revenue of KRW 22.18 trillion and an operating profit of KRW 751.9 billion. This revenue marks the highest ever for a third quarter, while the operating profit ranks as the fourth highest in the company’s history.
Several external factors impacted the third quarter, including a prolonged delay in market demand recovery and ongoing geopolitical conflicts worldwide. These challenges led to a rise in global shipping expenses, contributing to increased costs.
Despite these obstacles, LG has achieved year-over-year revenue growth for four consecutive quarters by upgrading its business portfolio. This includes transforming business methods and models and expanding B2B operations. These efforts have allowed LG to partially offset the unavoidable cost increases, enabling the company to maintain a robust operating profit, signifying the retention of strong fundamental competitiveness.
Looking ahead, LG plans to further accelerate its business transformation by expanding home appliance subscriptions, direct-to-consumer (D2C) sales and volume zone product sales. In addition, the company aims to drive steady growth in the B2B sector while also expanding platform-based content and service businesses.
The LG Home Appliance & Air Solution Company generated third-quarter revenue of KRW 8.34 trillion and an operating profit of KRW 527.2 billion. Compared to the same period last year, revenue increased by 11.7 percent and operating profit by 5.5 percent. Despite challenging external conditions, LG’s home appliance business outperformed its peers, reaffirming its top-tier competitiveness. Even with the delayed recovery in global appliance demand, the rapid growth of the subscription business model and B2B HVAC business drove revenue expansion. Although the surge in logistics costs in the second half of the year significantly impacted operating profit, the company achieved results exceeding the same period last year, thanks to revenue growth and exceptional manufacturing competitiveness.
In the fourth quarter, market conditions are expected to gradually improve, as indicated by improvements in leading economic indicators in major countries and interest rate cuts. LG plans to diversify its home appliance lineup and pricing strategy to meet the growing demand in emerging markets, while also expanding new businesses such as subscriptions and D2C sales to maintain revenue growth. The company will continue to focus on efficient operations, considering the seasonal increase in marketing expenses, to secure profitability.
The LG Home Entertainment Company posted third-quarter revenue of KRW 3.75 trillion and an operating profit of KRW 49.4 billion. Revenue increased by 5.2 percent compared to the same period last year, driven by increased shipments in Europe – a key market for OLED TVs. Although the cost burden increased significantly due to a sharp rise in LCD panel prices, the continued growth of the webOS-based content and services business minimized the impact on overall profits.
In the fourth quarter, the TV market is expected to see slight growth, primarily in entry-level products, compared to the same period last year. LG plans to respond flexibly to changes in TV market demand while accelerating growth by expanding its webOS partnerships to increase its user base.
The LG Vehicle component Solutions Company reported third-quarter revenue of KRW 2.61 trillion and an operating profit of KRW 1.1 billion. Revenue increased compared to the same period last year but slightly decreased from the previous quarter due to a slowdown in electric vehicle (EV) demand. Operating profit also declined, impacted by increased R&D expenses for securing software-defined vehicle (SDV) technology and preemptive investments for mass production of order volumes.
The market in the fourth quarter is expected to maintain a growth trend compared to the same period last year and the previous quarter. However, growth is anticipated to slow due to stagnant EV demand. LG plans to focus on sales growth based on its secured order backlog and on strengthening the market position of its main products, including telematics, AVN and motors. Additionally, the company will continue efforts to improve efficiency across its operations and pursue profitability.
The LG Business Solutions Company reported third-quarter revenue of KRW 1.40 trillion and an operating loss of KRW 76.9 billion. Revenue grew year-over-year due to increased sales of strategic products such as gaming monitors and LED signage, as well as securing large-scale B2B orders for PC products. However, the operating loss expanded due to rising LCD panel prices, increased logistics costs, intensified competition and higher investments in nurturing new businesses within the Company.
In the fourth quarter, demand for strategic product lines including gaming monitors and LED signage is expected to grow by double digits compared to the same period last year. Additionally, the rising interest in AI PCs is anticipated to boost demand for premium laptops. Consequently, the Company plans to expand sales of strategic products and focus on improving profitability through efficient operations.
Meanwhile, following a board resolution last month, LG decided to discontinue its battery pack business. As a result, starting from the third-quarter earnings report, related revenue and operating profit will be treated as discontinued operations in the financial statements. This will also lead to adjustments in past revenue and operating profit figures.
Earnings Conference and Conference Call
LG Electronics will hold a Korean / English conference call on October 24, 2024, at 16:30 Korea Standard Time (07:00 GMT/UTC). Conference call participants should pre-register online to receive a private PIN. The corresponding presentation file will be available for download at the LG Electronics website before the call.
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About LG Electronics, Inc.
LG Electronics is a global innovator in technology and consumer electronics with a presence in almost every country and an international workforce of more than 74,000. LG’s four companies – Home Appliance & Air Solution, Home Entertainment, Vehicle component Solutions and Business Solutions – combined for global revenue of over KRW 82 trillion in 2023. LG is a leading manufacturer of consumer and commercial products ranging from TVs, home appliances, air solutions, monitors, automotive components and solutions, and its premium LG SIGNATURE and intelligent LG ThinQ brands are familiar names world over. Visit www.LGnewsroom.com for the latest news.