LG Electronics posted its best results from its mobile unit in five years as sales and operating profit jumped thanks to record-high smartphone sales in the third quarter, driven largely by the G3, the company's latest flagship device.
On a company-wide basis, LG said its net profit for the third quarter soared 87 percent to $194 million (203 billion won) from $103.6 million in the year-ago period. Total company sales grew 7.4 percent year-over-year to $14.2 billion in the third quarter.
The company's mobile unit had a banner quarter though, indicating that the company can maintain momentum even in the face of fresh, high-end smartphones from Samsung Electronics and Apple (NASDAQ: AAPL). Although LG still trails the market leaders by a wide margin in terms of sales and profit, it's clearly holding its own.
LG reported sales in its mobile unit of $4.14 billion, up 39 percent year-over-year. The company said it sold a total of 21.8 million total handsets (smartphones and feature phones) in the third quarter, up from 18.3 million in the year-ago period. The company's smartphone sales also boomed, growing to 16.8 million, up 39 percent from the 12 million it had in the year-ago quarter and up 16 percent from 14.5 million units in the second quarter.
In terms of operating income, LG's mobile unit reported $163 million, a sharp reversal from a year-ago loss of around $76 million. Both sales and operating income for the mobile unit were LG's highest since the third quarter of 2009.
For the third quarter LG said total handset shipments in North America increased by 39 percent from the second quarter, thanks to the launch of the G3 and stronger L-Series sales. In the United States, Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS) are selling the G3.
Looking ahead to the fourth quarter, LG said the overall market will grow, especially for LTE phones. However, LG expects competition to intensify both in the premium segment and on price in the mass-market segment. Despite that, LG said it expects to maximize its sales at high end of the market, especially for the G3, and to strengthen the mass-tier lineup with G3 variants and L-Series III models.
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