LG swings to Q3 net loss on poor TV, phone sales

South Korea's LG Electronics said Wednesday it swung to a net loss in the third quarter due mainly to the poor performance of its flat-panel and smartphone businesses. The firm lost 414 billion won ($366 million) in July-September compared with a net profit of 75.7 billion won a year earlier. Consolidated third-quarter sales fell 4.0 percent year-on-year to 12.9 trillion won. However, its loss was cut to 32 billion won from a 185 billion won loss a year ago, thanks to cost controls and efficiency improvements. "The sluggish global economy affected overall sales in the quarter, while losses on investments in affiliated companies led to a quarterly net loss," the company said in a statement. LG's flat panel unit, LD Display, posted a record net loss of 687.5 billion won in the third quarter compared with a net profit of 224 billion won a year earlier. Sales in its mobile communications sector fell 8.5 percent to 2.76 trillion won. LG, the world's third-largest handset maker, is battling to turn around its loss-making handset operations, where it lags Samsung Electronics and Apple in offering high-margin smartphones packed with features. Earlier this month ratings agency Moody's lowered its outlook on LG's Baa2 issuer and senior unsecured debt ratings to negative from stable, while Standard & Poor's cut its long-term corporate credit rating on the firm by one notch. This month LG launched a new 4G smartphone with ultra-high-speed network technology based on Long-Term Evolution (LTE). The company said it expects to see modest growth in the coming months with competitive LTE smartphones, new 3D TVs and consumer-friendly, energy efficient appliances. It also promised to focus on strengthening profitability "through more aggressive cost control and better allocation of resources".