Samsung Electronics and LG Electronics had not made significant performance during 3rd quarter due to poor performance in their respective Smartphone businesses. While Samsung Electronics’ Smartphone business has struggled due to discontinuation of Galaxy Note 7, LG Electronics’ Smartphone business continues to struggle. However both companies are making respectable performance overall due to positive performance from other businesses. Experts believe that 4th quarter performance for these two companies is in the hands of their Smartphone businesses.
Samsung Electronics made an announcement on the 27th that it made $41.7 billion (47.82 trillion KRW) and $4.52 billion (5.2 trillion KRW) in sales and operating profits from Samsung Electronics and its subsidiaries.
Sales of this year’s 3rd quarter are decreased by 7.5% from sales of last year’s 3rd quarter when they were $45.1 billion (51.68 trillion KRW). Operating profits of this year’s 3rd quarter are decreased sharply by 29.7% from operating profits of last year’s 3rd quarter when they were $6.44 billion (7.39 trillion KRW).
Looking at Samsung Electronics’ performance by each sector, Samsung Electronics’ IM (Information Mobile) sector made $19.7 billion (22.54 trillion and $87.2 million (100 billion KRW) in sales and operating profits respectively. Discontinuation of Galaxy Note 7 has had direct effect on IM sector’s performance.
DS (Display Solution) sector made $11.5 billion (13.15 trillion KRW) and $2.94 billion (3.37 trillion KRW) in sales and operating profits respectively from semiconductors. It also made $6.16 billion (7.06 trillion KRW) and $889 million (1.02 trillion KRW) in sales and operating profits respectively from displays and had a performance that is higher than expectations.
CE (Consumer Electronics) sector also did pretty well by making $9.80 billion (11.24 trillion KRW) and $671 million (770 billion KRW) in sales and operating profits respectively. CE sector made $2.01 billion (2.31 trillion KRW) in operating profits until 3rd quarter of this year through sales of premium products, and this value is almost double the amount of last year’s operating profits at $1.09 billion (1.25 trillion KRW).
Samsung Electronics’ goal is to recover its performance by shaking off negative effects that were brought by discontinuation of Galaxy Note 7.
“We are going to actively aim for improvement in 4th quarter performance of the whole company based on growth of our component business.” said Executive Director Lee Myung-jin who is in charge of Samsung Electronics’ IR. “We are going to recover performance of IM sector to last year’s performance through sales of Galaxy S7.”
LG Electronics, which also made an announcement of its 3rd quarter performance on the same day, announced of its overall poor performance due to Smartphone business that is slumping.
LG Electronics announced that it made $11.5 billion (13.2243 trillion KRW) and $247 million (283.2 billion KRW) in sales and operating profits respectively from LG Electronics and its subsidiaries.
Sales of this year’s 3rd quarter are decreased by 5.7% from sales of last year’s 3rd quarter when they were $12.2 billion (14.0288 trillion KRW). Operating profits of this year’s 3rd quarter are decreased by 3.7% from operating profits of last year’s 3rd quarter when they were $256 million (294 billion KRW).
Although MC (Mobile Communication) Business Headquarters was not able to get out of its slump, performance of H&A (Home appliance & Air solution) Business Headquarters and HE (Home Entertainment) Business Headquarters has continued to increase.
H&A Business Headquarters made $3.72 billion (4.2712 trillion KRW) and $299 million (342.8 billion KRW) in sales and operating profits respectively. Its sales and operating profits increased by 2.8% and 39.6% respectively compared to 3rd quarter of last year.
HE Business Headquarters made $3.61 billion (4.1415 trillion KRW) and $333 million (381.5 billion KRW) in sales and operating profits respectively. Although its sales decreased by 3.4%, it made its biggest quarterly operating profits and quarterly operating profit ratio (9.2%). Its operating profits increased sharply by more than 10 times compared to 3rd quarter of last year.
MC Business Headquarters was not able to get out of its slump by making $2.19 billion (2.517 trillion KRW) and $380 million (436.4 billion KRW) in sales and operating losses respectively. Its performance was affected by poor sales of premium products and decrease in prices of Smartphones.
VC Business Headquarters made $588 million (674.9 billion KRW) and $14.1 million (16.2 billion KRW) in sales and operating profits respectively.
It is predicted that H&A Business Headquarters and HE Business Headquarters will maintain their performance during 4th quarter. VC Business Headquarters is also looking to increase its sales by stable supply of its components to GM’s ‘Chevrolet Bolt EV’. However it is predicted that it will be again difficult for MC Business Headquarters to make surplus in 4th quarter.
Staff Reporter Kwon, Keonho | wingh1@etnews.com
