LG Electronics Q3 revenue 23.8 trillion won, operating profit up 13.5% but below consensus
In short
LG Electronics reported preliminary third-quarter revenue of 23.827 trillion won, up 8.9% from a year earlier, and operating profit of 781.8 billion won, up 13.5%. Both figures fell short of the average analyst consensus, and the shares dropped more than 7% in late-morning trade. The company said cumulative revenue and operating profit for the first three quarters passed 70 trillion won and 4 trillion won respectively for the first time.
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LG Electronics reported preliminary third-quarter revenue of 23.827 trillion won, up 8.9% from a year earlier, and operating profit of 781.8 billion won, up 13.5%, in a regulatory filing on Oct 7. Both figures came in below the average analyst consensus, and the shares fell. According to the Korea Exchange, the stock was trading at 215,000 won, down 7.53% from the previous session, at 11:25 that morning. [ 7 , 8 , 9 , 10 , 12 , 14 , 18 , 19 ]
For the first three quarters, revenue reached 71.3807 trillion won, up 9.2%, and operating profit 4.0346 trillion won, up 55.9%. The company said this was the first time both the 70 trillion won revenue and 4 trillion won operating profit marks were passed on a cumulative three-quarter basis, with revenue and operating profit up year on year in each quarter of the year. [ 7 , 8 , 9 , 10 , 11 , 16 , 18 ]
The documents differ on the consensus figures used for comparison. Two reports put the average at 24.2150 trillion won in revenue and 1.0301 trillion won in operating profit, while three others give 24.2744 trillion won and 1.0401 trillion won. All agree the company missed the market's expectations. [ 10 , 12 , 14 , 16 , 18 ]
By business, the company said its home appliance unit grew through a two-track strategy spanning premium and volume products plus appliance subscriptions, online sales and B2B, while the vehicle components unit converted its order backlog into sales and raised the share of premium in-vehicle infotainment. The media and entertainment unit returned to improved profitability on OLED TV sales and the webOS platform, and the HVAC unit held revenue at the year-earlier level while profitability declined slightly on investment in new production capacity and new-business hiring. [ 7 , 8 , 10 , 11 , 16 , 18 ]
LG Electronics said company-wide cost structure improvements and operating leverage from higher sales offset increases in logistics, material and fixed costs. Business and tech outlets attributed the shortfall against consensus in part to the listed subsidiary LG Innotek, citing a Kiwoom Securities estimate that LG Innotek's third-quarter operating profit would be 91.7 billion won, less than half the 203.8 billion won a year earlier, which Kiwoom linked to exchange-rate timing on raw materials. [ 8 , 9 , 10 , 14 , 16 ]
The company said it is directing cash generated by its core businesses into future growth areas, expanding domestic and overseas production for AI data centre cooling solutions, building what it calls the country's largest data factory in Yangjae, Seoul, and preparing actuator mass-production infrastructure in Changwon, South Gyeongsang Province. The quarterly figures are preliminary under K-IFRS; net income and division-level results are due at an earnings presentation later this month. [ 7 , 9 , 10 , 11 , 18 ]
Why it matters
LG Electronics is a major Korean manufacturer whose quarterly results are watched as a gauge of the home appliance and automotive electronics industries. Weak profitability at its listed subsidiary LG Innotek weighed on the consolidated figure, and operating cash flow from the core businesses is being directed into AI data centre cooling and robotics. Division-level results and net income are still to come at this month's earnings presentation.
Key facts
- LG Electronics reported preliminary third-quarter revenue of 23.827 trillion won, up 8.9% from a year earlier. [ 2 , 3 , 5 , 7 , 8 , 9 , 10 , 11 , 12 , 16 , 18 ]
- Preliminary third-quarter operating profit was 781.8 billion won, up 13.5% from a year earlier. [ 4 , 5 , 7 , 8 , 9 , 10 , 11 , 12 , 16 , 18 ]
- Both figures came in below the average analyst consensus, which the documents put at either 24.2150 trillion won in revenue and 1.0301 trillion won in operating profit, or 24.2744 trillion won and 1.0401 trillion won. [ 10 , 12 , 14 , 16 , 18 ]
- Cumulative revenue for the first three quarters was 71.3807 trillion won, up 9.2%, and cumulative operating profit was 4.0346 trillion won, up 55.9%, the first time both thresholds were passed together. [ 7 , 8 , 9 , 10 , 11 , 16 , 18 ]
- The company said cost structure improvement and operating leverage from higher sales offset increases in logistics, material and fixed costs. [ 7 , 9 , 10 , 11 , 16 , 18 ]
- LG Electronics shares were trading at 215,000 won, down 7.53% from the previous close, at 11:25 on Oct 7, according to the Korea Exchange. [ 14 ]
- The company said it is expanding production for AI data centre cooling solutions, building a data factory in Yangjae, Seoul, and actuator mass-production infrastructure in Changwon, South Gyeongsang Province. [ 7 , 9 , 10 , 11 , 18 ]
- The figures are preliminary under K-IFRS; net income and division-level results will be released at an earnings presentation later this month. [ 7 , 10 , 11 , 18 ]
Confirmed by several sources
- LG Electronics reported preliminary third-quarter revenue of 23.827 trillion won, up 8.9% year on year, and operating profit of 781.8 billion won, up 13.5%. [ 3 , 4 , 5 , 7 , 8 , 9 , 10 , 11 , 12 , 16 , 18 ]
- The results fell short of the average market consensus. [ 7 , 8 , 9 , 10 , 12 , 14 , 16 , 18 , 19 ]
- Cumulative operating profit for the first three quarters exceeded 4 trillion won for the first time, and cumulative revenue exceeded 70 trillion won for the first time. [ 7 , 8 , 9 , 10 , 11 , 13 , 16 , 18 ]
- The company attributed the result to cost structure improvements, operating leverage and growth in Global South and B2B sales. [ 7 , 9 , 10 , 11 , 16 , 18 ]
Still unclear
- The exact consensus figures for third-quarter revenue and operating profit. Documents give different averages: 24.2150 trillion won in revenue and 1.0301 trillion won in operating profit in two reports, and 24.2744 trillion won and 1.0401 trillion won in three others.
- Division-level results and net income for the quarter. The company has not yet published them; it says they will be released at an earnings presentation later this month.
- The precise cause of the shortfall against consensus. Business and tech outlets point to subsidiary LG Innotek's profitability, citing a Kiwoom Securities estimate of 91.7 billion won in third-quarter operating profit, less than half the 203.8 billion won a year earlier, and attribute it to exchange-rate timing; the company itself did not confirm this.
What local media are saying
Timeline, local time
- The average analyst consensus stood at 24.2150 trillion won in revenue and 1.0301 trillion won in operating profit, according to FnGuide. [ 10 ]
- News reports the preliminary third-quarter results: revenue 23.827 trillion won and operating profit 781.8 billion won. [ 2 , 3 , 4 ]
- LG Electronics shares trade at 215,000 won, down 7.53% from the previous session, according to the Korea Exchange. [ 14 ]
- Reports link the shortfall against market expectations to the fall in the share price and note weaker profitability in the HVAC business. [ 19 ]