LG’s Q3 operating profit down 21%

LG Electronics Co. said Tuesday its operating profit for the third quarter fell 20.9 percent from a year earlier, missing market expectations, due to higher logistics and marketing costs.

The company said in a regulatory filing that its operating profit came to 751.1 billion won ($556.9 million) for the July-September period, down from 905.1 billion won a year earlier.

The company also said sales rose 10.7 percent to 22.17 trillion won, without providing net income data. The quarterly sales were the largest for any third quarter in its history.

The operating profit was 22.5 percent lower than the median estimate, according to a survey by Yonhap Infomax.

LG Electronics said the weak earnings were due to higher shipping fees and marketing costs amid intensifying competition.

But its business-to-business segments, including electric vehicle components, subscriptions and heating, ventilation and air conditioning (HVAC) businesses, posted steady growth in the third quarter.

“While the external environment remains challenging, including delayed demand recovery, rising raw material costs and fluctuations in ocean freight rates, it is important that we are steadily increasing our sales volume,” LG said in a statement.

“Thanks to our efforts to revamp our business portfolio, our core competitiveness has improved and we are maintaining our growth momentum.”

The South Korean home appliance giant has been making continued efforts to diversify its business portfolio and transform into a company focused on future technologies, after divesting its smartphone business in 2021.