LG's Q3 profit plunges 99% amid continued handset stumbles

LG Electronics continued to struggle in handset sales in the third quarter, an indication that it will have a difficult time reversing momentum in the unit, particularly in smartphones.

On a company-wide basis, the South Korean electronics conglomerate reported a profit of just $6.7 million, down from $805.6 million in the year-ago period. Overall sales fell 2 percent to $11.87 billion.

However, it was the company's mobile communications unit that took the biggest hit. The unit posted a record operating loss of $270 million in the quarter, which comes on the back of a $101 million operating loss in the second quarter. Sales dropped 30 percent year-over-year.

LG shipped 28.4 million units in the quarter, down 10 percent from the year-ago quarter and down 7 percent from the second quarter. The company blamed declining sales, weaker average selling prices and continued investments in research and development.

The company predicted its handset business will improve due to increased Android smartphone shipments, though cautioned an upswing might not happen until the first quarter.

"We expect the sales prices for handsets to improve from the fourth quarter of this year, helped by our Optimus One smartphone rollouts," LG CFO David Jung said, according to Dow Jones Newswires. "LG is targeting to sell as much as 3 million Optimus One smartphones globally by the end of this year ... and we expect the handset division to see a strong recovery at least from the first quarter," he added.

LG said it expects to see an increase in smartphone shipments in the fourth quarter as the Optimus One gains wider global support, and as its Windows Phone 7 devices go on sale. The company said it will also target mid-tier consumers with touchscreen and Qwerty phones.

LG , the world's No. 3 handset maker by shipments, is trying to catch up in the smartphone market but has so far failed to gain much traction against rivals like HTC, Motorola (NYSE:MOT) and Samsung. LG CEO Nam Yong resigned in September amid declining handset sales. 

For more:
- see this release
- see this Dow Jones Newswires article (sub. req.)
- see this Bloomberg article
- see this Reuters article
- see this FierceWireless Q3 earnings page

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