LG Electronics posts record Q3 revenue, but sees dip in OP

(Han Joo-hyung)

LG Electronics Inc. reported its highest-ever third-quarter revenue, continuing its growth via business portfolio enhancements although quarterly operating profit declined by about 20 percent thanks to rising logistics costs.

According to regulatory filings on Thursday, the company’s third-quarter revenue for 2024 rose 10.7 percent year-on-year to 22.18 trillion won ($16 billion), a record for the period. This marked the fourth consecutive quarter of revenue growth, driven by shifts in its business model and a stronger focus on business-to-business (B2B) operations.

However, operating profit dropped 20.9 percent year-on-year to 751.9 billion won, the fourth-highest third-quarter result in the company’s history. The surge in logistics costs, particularly as sea freight rates peaked around July 2024, was a key factor affecting performance. Although costs have somewhat stabilized in the fourth quarter of 2024, they remain significantly higher than those for the previous year.

“Global shipping costs rose in the third quarter due to prolonged delays in market demand recovery, geopolitical conflicts in the Middle East, and the U.S. tariff hike on China announced in May,” the company explained.

By division, the home appliance division reported third-quarter revenue of 8.34 trillion won and operating profit of 527.2 billion won, up 11.7 percent and 5.5 percent respectively from a year earlier. Growth was driven by the B2B heating, ventilation, and air conditioning business and subscription-based home appliance services.

The home entertainment division, which oversees the TV business, posted revenue of 3.75 trillion won and an operating profit of 49.4 billion won. Performance improved due to increased shipments of organic light-emitting diode TVs, particularly in Europe, a key market. Growth in the WebOS content and services business also helped limit losses.

The vehicle component solutions division, which handles automotive electronics, recorded third-quarter revenue of 2.61 trillion won and an operating profit of 1.1 billion won. Sales dipped slightly from the previous quarter due to weaker demand for electric vehicles.

The business solutions division, focused on information technology devices and commercial displays, reported revenue of 1.4 trillion won but faced an operating loss of 76.9 billion won. Although sales of strategic products such as gaming monitors and light emitting diode signage grew, higher liquid-crystal display panel prices, logistics costs, and increased investments in new business ventures widened the division’s losses.