Smartphone competition weights on LG earnings

A man uses his mobile phone near a banner advertising LG Electronics’ G2 smartphone at downtown Seoul, South Korea, Thursday, Oct. 24, 2013. AP

SEOUL, South Korea — LG Electronics Inc. says third quarter profit slid 34 percent as it cut prices and spent more on marketing to carve out a share of the high-end smartphone market.

LG on Thursday reported July-September net income of 108.5 billion won ($103 million) compared with 164.5 billion won a year earlier. Analysts forecast 197.6 billion won, according to financial data provider FactSet.

The result shows the challenges faced by handset makers trying to break into the premium smartphone market dominated by Samsung and Apple.

LG blamed higher marketing costs and intense competition that forced it to lower prices. Its handset business lost 79.7 billion won despite selling 12 million smartphones.

Quarterly sales rose 5 percent to 13.9 trillion won ($12.5 billion). Operating profit was up 27 percent to 217.8 billion won.