LG Energy Solution Reports 40% Rise in Quarterly Profit on Increased US Output
Battery firm LG Energy Solution Q3 profit rises 40% on increased US output
LG Energy Solution, a South Korean battery firm, has announced a 40% increase in quarterly profit, thanks to the surge in output from its joint venture factory with General Motors (GM) in the United States. The company, which supplies automakers such as Tesla and GM, reported an operating profit of 731 billion won ($543.46 million) for the July-September period, compared to 522 billion won in the same period last year.
Positive Results in Line with Expectations
The reported profit aligns with LG Energy Solution’s estimate of 731 billion won, which they provided earlier this month. It also exceeds the average forecast of 659 billion won by LSEG SmartEstimate, a platform that weighs forecasts from consistently accurate analysts. Despite these positive results, LG Energy Solution’s shares dropped 3.7% during morning trade, while the benchmark index experienced a 0.2% fall.
Revenue Growth and Factors Driving Success
The company’s revenue for the September quarter rose by 7.5% to 8.2 trillion won, according to a regulatory filing. LG Energy Solution has benefited from US tax credits for electric vehicles under the Inflation Reduction Act, as well as the increased production at its battery plant joint venture with GM. Analysts believe these factors have contributed to the company’s success in the market.
GM’s Decision to Cut Costs
However, General Motors announced on Tuesday that it would be slowing down the launch of several electric vehicle models in order to reduce costs. Additionally, the company plans to prioritize profits over sales targets by cutting back on electric vehicle product spending. This decision by GM may have implications for LG Energy Solution’s future prospects in the electric vehicle market.
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